Global streamers fear doubling of taxation in Brazil if bill passes Senate

Global SVoD services such as Netflix, Amazon, Disney+ and HBO Max are hoping to block parts of a recently approved streaming-regulation bill in the Brazilian Senate, fearing it would double their taxation in the country.

Eduardo Gomes

Bill PL 8.889/2017 passed in the Chamber of Deputies and is now under Senate review.

Under Brazil’s legislative system, the text approved in the Chamber must be examined alongside a parallel bill, PL 2.331/2022, which has already been approved by the Senate and must be considered as the baseline if a streaming-regulation law is enacted.

Crucially, the Senate bill offers two clear advantages for global streamers.

First, it sets the Condecine levy (a contribution for the development of the national film industry) at 3% of platforms’ gross revenues, compared with the 4% rate established in the Chamber’s bill.

Second, while PL 8.889/2017 introduces an additional tax, known as the Condecine-Remessa, which would be applied when platforms transfer dividends to their parent companies abroad, PL 2.331/2022 exempts foreign platforms from paying this extra charge.

This makes it essential for global streamers that the Senate bill prevails, at least on the articles that would otherwise increase their contributions to the Brazilian state and boost funds earmarked for local production.

The Chamber’s newly approved text could be set aside, however. Any amendment to PL 8.889/2017 would force the bill to return to the Chamber, dragging the process out indefinitely, so the most likely scenario is that senator Eduardo Gomes, rapporteur of the original bill and expected to lead the discussion, will opt for a “composition of articles” between the two bills.

This would involve a line-by-line comparison of both texts, choosing which articles prevail in each case and opening the door for the provisions imposing lower taxes on global streamers to remain in place, even though that would reduce the resources available for local production.

Other articles at stake include those relating to the tax burden for user-generated content platforms such as YouTube and TikTok: 3% under the Senate bill versus 0.8% under the Chamber’s bill – a major gap.

On these and other issues, including obligations for platforms to carry minimum quotas of national content or the level of tax rebate they can obtain through investment in local production or infrastructure, the final outcome will depend on which articles survive the process.

Negotiations are already underway in the Senate and the clock is ticking. Congress goes into recess on December 17 and, if timings do not allow a vote this year, Brazil’s streaming-regulation bill will move to 2026, an election year, which would complicate matters even further.

It is an historic moment in Brazil and the coming days will be decisive. The industry has spent more than a decade debating regulation and leaving millions of dollars from major international corporations uncollected. But no bill has ever come this close to passing.