The reform, which involves merging two key tax regimes —IBS (Imposto sobre Bens e Serviços) and CBS (Contribuição sobre Bens e Serviços) — is expected to be rolled out in the coming months. Analysts say the overhaul could have far-reaching implications for the country’s digital economy, which includes streaming services, e-commerce platforms, cloud computing, and data storage providers. Under Brazil’s fragmented federal tax structure, digital companies have long struggled to navigate inconsistent tax classifications across states and municipalities, a challenge exacerbated by the growing volume of digital transactions. However, it will also require digital companies to adopt new compliance measures. Digital platforms will now act as intermediaries, responsible for collecting and remitting taxes to authorities based on where the consumer uses the service.