Taxation on OTT in Brazil

Over-The-Top services have been exponentially growing over the past few years in Brazil. However, the market still lacks specific regulations. In this article we will talk about the taxation for OTT in Brazil.

The arrival of major streaming services in Brazil, dating back to 2011, caused controversy among the paid and cable television companies. Because of this, regulatory agencies demanded a review of the current legislation for the services in order for OTT and paid-TV operators to compete fairly in this market. Nowadays, Brazil still does not have specific regulations for OTT, although one is predicted to be released in the second semester of 2015, according to Anatel, the Brazilian Telecommunications Agency. The current regulation covers only Cable TV, DTH, MMDS and other subscription service for Live TV.

ABTA, the Brazilian Paid-TV Association, stated, in 2014, that the segment was not affected by competition from OTT. Currently, paid TV is registering an annual growth of 11%, totalling 19,6 million subscribers. In order to create a competitive environment for these companies, Brazilian authorities implied the importance of extending the same rules to all services.

A similar regulation for both sectors could balance the business scenario between companies, since paid-TV operators, who are the ones who pay specific taxes and follow strict regulations, are at a disadvantage. Overall, around 25% of the monthly price for paid TV are taxes. At the time of their arrival, it was said that OTT services collected money and then sent it to another country like the United States, without offering any benefit to Brazil, where approximately 2.2 million subscribers were charged for services. The taxes charged today go directly to fund cinematography production in Brazil, since the other taxes such as ICMS, PIS, COFINS etc. would help infrastructure investment and create jobs.

The current taxation for OTT in Brazil

Considering the launch of OTT services is fairly recent, this type of content delivery platforms still lack proper classification by Brazilian telecommunication authorities, which makes it harder to create a specific regulation for it. In Brazil, Anatel is still debating the subject with plans on releasing new directives in the future.


Ancine, or the National Agency of Cinema, already charges a fee over commercial transactions of videos and films, which is known as Condecine. The tax is charged on the production, licensing and distribution for commercial purposes of video content in Brazil. Since 2011, the regulation applies to all segments that commercialize audiovisual products. The rates charged depend on the runtime, type and origin of the titles in the catalog, and are required to be paid once every five years or once every 12 months in the case of publicity products. The prices are as follows:

  • Film and video-phonographic productions: BRL 300.00
  • Film and video-phonographic productions with runtime between 15 minutes and 50 minutes: BRL 300.00
  • Film and video-phonographic productions with runtime longer than 50 minutes: BRL 3,000.00
  • Film and series video-phonographic productions (per chapter or episode): BRL 750.00

In 2012, an update to Condecine led to a larger taxation for video streaming services. According to the new regulation, up to BRL 3,000 can be charged for each foreign video available in the catalog of streaming services in Brazil, according to its duration. For national videos only 20% of this sum is charged. This new regulation is applicable to multiple segments in the video streaming market, which includes on-demand video platforms that work similarly to OTT services. Condecine still demands a tax of 11% from all the income sent abroad due to commercial business related to film and video productions. They are exempt from this charge if 3% of the income is invested in independent productions approved by Ancine.

Recently Ancine published an official regulatory agenda, that plans the proper regulation of video on demand delivery services to take place until 2016. Among the terms to be revised by the agency are the criteria of charging Condecine fees to the entire catalogs of OTT VOD services. Another point, and perhaps the most important, is the creation of specific definition for this market, helping to a better understanding on its activities. Although focused on VOD services, such regulation could be applied to all streaming services, but it is still not decided.

Although the services are not taxed, the provider company is subject to taxation of PIS, COFINS, IRPJ, CSLL and ICMS or ISS according to specifications on legislation.

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