Through the COSIT Consultation Solution nº 191 (03/29/2017), the Federal Revenue Service of Brazil (RFB) analyzed whether payments made to the source located abroad, in consideration of authorizations for access and remote use of software, which may hosted in the cloud, and accessed remotely, via the internet, via login and password, are subject to taxation by the Income Tax Withheld at Source (IRRF) and the Contribution for Intervention in the Economic Domain (CIDE) .
According to the RFB, the sale of licenses for the use of Software as a Service (SaaS) is not the same as the traditional acquisition of software, since customers do not receive them for installation on their own machines. Thus, the copyright remains under the administration of the foreign company, which even provides maintenance and technical support for the operation of the available applications.
In this line, the RFB interprets the consideration for authorizations to access and use the SaaS as a consideration for a technical service, subject to the rate of 15% of IRRF and 10% of CIDE.
In the case of CIDE, the RFB removed the exemption present in art. 1, §1-A, of Law No. 10,168/2000, as it understands that Saas does not deal with remuneration for license to use or rights to commercialize or distribute a computer program, as there is no effective acquisition of software by the Brazilian customer.
Source: Solução de Consulta COSIT nº 191, de 23/03/2017 (DOU 29/03/2017)