Telecommunication Taxes in Brazil

Published: 27 Aug 2015

Last Updated: 27 Aug 2015

Brazil holds one of the most burdening taxation policies for telecommunications in the world, a factor that hampers the expansion of these services in the country. In this article we will provide an overview of the telecommunication taxes in Brazil.

Taxation Policies for Telecommunications in Brazil

On average, 40% to 50% of the costs of telecommunication services in Brazil are related to taxes, rates that position the country in the top spots for the highest taxation for this sector in the world. The main responsible for these costs is ICMS, a value-added tax on the circulation of goods, which is charged to consumers and ranges from 25% to 30% of the total cost of the services provided. According to analysts, the telecommunication sector is responsible for 12% of the total collection of ICMS in Brazil.

There are also a number of taxes charged solely on telecommunication services, which were created to foster the expansion of communications and the digital inclusion in the country. Most of these taxes apply relatively low rates when compared to ICMS, and have their funds reverted to the inspection of the services themselves and to projects such as financing the installation of telecommunication networks in remote areas of the county.

The high cost for telecommunication service bills in Brazil are also related to the generally high taxation applied to the private sector, which end up reflected on the costs charged to the end users. Below, we have compiled a list of the major taxes for telecommunications in Brazil, including their background, who they are charged to and their rates.


The Brazilian state value-added tax, known as ICMS, represents the largest burden for telecommunication services to both consumers and companies in the country. The tax is regulated by each Brazilian state, and therefore its rates are dependent on where the services are consumed, ranging from 25% in states like São Paulo, Rio Grande do Sul and Minas Gerais, to 29% in the state of Rio de Janeiro and 35% in the state of Rondônia.

ICMS is charged to consumers at the moment of payment for telecommunication services, and also to companies when operating a variety of services such as hosting, equipment maintenance and rental. Due to this cumulative nature, the actual effect of ICMS on telecommunication service bills can be much greater than their official rates, with some analysts stating that, combined with federal taxes PIS and COFINS, it can represent upwards of 60% of the total cost for these services in some Brazilian states.


Created in 1966, the Funds for the Inspection of Telecommunications, or in short FISTEL, is a Brazilian tax for telecommunication providers designed to provide resources for the government to better supervise the offering of these services. The tax is applied to companies that operate various types of telecommunications, ranging from broadband providers to radio and television broadcasters. FISTEL is charged in two parts:

  • Tax on Inspection of Installation, or TFI, which is charged at the moment of installation of telecommunication stations and for each new subscriber, in case of mobile operators
  • Tax on Inspection of Operation, or TFF, which is charged annually for each operational telecommunication station and active subscriber, in case of mobile operators

The charges of TFI and TFF vary between BRL 26,83 and BRL 29.497,00, depending on the type of equipment that is installed or maintained. Some types of equipment may be subject to temporary exemptions of FISTEL, which as of 2015 is the case for Small Cells with transmitters with less than 5W of power.


The Fund of Universalization of Telecommunication Services, or in short FUST, was created in the year 2000 with the objective of collecting funds to finance digital inclusion projects in Brazil. The charge for FUST is set at 1% of the monthly gross revenue of telecommunication service providers, such as telephone operators and broadband internet providers. According to Anatel, the Brazilian Telecommunications Agency, since it was instituted FUST was responsible for the collection of over BRL 17 billion.

A similar contribution, known as FUNTTEL or short for Fund for the Technological Development of Telecommunications, was also introduced in the year 2000 and is designed to foster technological development and research projects in the country. The Brazilian Ministry of Communication is responsible for selecting which projects are eligible to receive financing from the fund, which from 2000 to 2010 amounted to BRL 942 million. Similarly to FUST, FUNTTEL charges are set at 0.5% of the monthly revenue of telecommunication service providers.

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Article Author

Marcelo Teixeira

Marcelo Teixeira