São Paulo state will change software taxation – R7

The rate will be levied on any means of delivery from January 2016

The government of Sao Paulo state will change soon the rules to tax software, is recorded in selling products on physical media (CD or DVD), or when the delivery of the license to the consumer is made by download. According to Decree No. 61522, published on September 29 by Governor Geraldo Alckmin (PSDB), the rate of 18% of the ICMS (Tax on Goods and Services) will focus on software sales, whatever the means of delivery, from January 2016.

Currently, in the case of programs sold on physical media, the government already collects GST, but the rate of 18% is calculated over double the amount of support physical (CD or DVD), as Decree No. 51619 of 27 February 2007.

“Taxation is calculated based on the support, which ends up generating insignificant amount,” says the Deputy Director of tax consulting the Treasury Department of São Paulo, Ivan Ozawa Ozai. He said the government’s objective is to align the taxation of ICMS to that adopted in other states.

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According to the responsible office of the tax area Tozzini Freire Advogados, Ana Claudia Utumi, depending on the features of the software, it will be taxed at ICMS or the ISS (Service Tax). When the software is developed custom, the sale is configured as a service and the municipality charges a rate of between 2% and 5%. Already software licenses, such as Office, Microsoft package, goods are considered -. Therefore, the ICMS will focus on the value

However, Law No. 9609 of February 19, 1998, known as the Law software, makes room for interpretation, since it categorizes downloading as copyright licensing programs. “When the Supreme Court examined this question, all software was sold on physical media. It was another reality,” says the lawyer.

The change in the tax regime will impact on companies in the sector since that São Paulo concentrates 40% of the national market. Sought by the state, the Abes (Brazilian Association of Software Industries) said that assesses the impact and, for now, will not comment. The information is the newspaper O Estado de S. Paulo.