The principles of full non-cumulative taxation, a broad tax base, destination-based taxation, external calculation, and, most importantly, the exemption of exports form the backbone of the Complementary Bill (PLP 80/2025) establishing Brazil’s tax reform, summarized tax attorney Luiz Gustavo Bichara during a webinar held on April 10, jointly organized by ABPI and ABAPI (Brazilian Association of Industrial Property Agents).
The debate, titled “Tax Reform and Its Impact on IP Services,” also featured tax expert Bruno Toledo Checchia, ABPI President Gabriel Leonardos, and ABAPI President Gabriel Di Blasi.
Analyzing Complementary Law No. 214/2025, which institutes the new tax on goods and services, Bichara pointed out that the legislation establishes that service exports require supply and consumption abroad.
“This is where the problem lies: oftentimes, it is nearly impossible to determine exactly where a service will be consumed,” he explained.
“Ideally, the law should simply require that the service be supplied to the foreign market, but unfortunately, it presumes that the service must also be consumed abroad.”
In meetings with lawmakers and Brazil’s Secretariat of Tax Reform, representing ABPI and ABAPI, the tax experts proposed amendments to the original bill text, emphasizing the impracticality of Paragraph 2 of Article 80 of PLP 80/2025, which states:
“If it is not possible to identify the place of consumption based on the conditions and characteristics of the supply, the place of consumption shall be presumed to be the purchaser’s place of residence abroad.”
According to Bichara, it will not always be possible to determine exactly where the service was enjoyed:
“And in this case, what does the Law prescribe? If the place cannot be identified, the rules of import taxation apply—which makes no sense because we are talking about an export transaction, not an import. The text is confusing,” he stated.
Checchia added that if consumption occurs abroad, it would qualify as an export. However, he cautioned, that if it happens in Brazil, it becomes difficult to determine which of the three tax rates (federal, state, or municipal) would apply:
“How can we identify the municipality responsible for taxing a patent service?” he asked.
“If we assume it occurs in Brazil, we have federal guidelines for taxation—but how do we pinpoint the municipal and state jurisdictions?”
Both experts agreed that the text’s ambiguity opens the door for further amendments to PLP 80/2025.
“We have already discussed this with officials at the Ministry of Finance, and they acknowledged the confusing language,” said Checchia.
“We believe there is room for debate on whether the consumption of patent services occurs within the national territory.”
Bichara added:
“Although it will not be easy, we still have strong arguments to advocate for an exception, similar to what has been granted to the financial sector.”
