Tax Appeals Board (CARF) Confirms Tax Payable on Apple Remittances: A Warning for IPR Importers into Brazil

In a landmark ruling that may significantly reshape how foreign tech and content providers operate in Brazil, the Administrative Council of Tax Appeals (Conselho Administrativo de Recursos Fiscais, “CARF”) recently upheld a tax assessment against Apple Serviços de Remessas Ltda (“Apple Brazil”), holding that the company was liable for the contribution on the intervention on the economic domain (Contribuição de Intervenção no Domínio Econômico, “CIDE”) on remittances made to its U.S. parent company in 2018.

The decision is relevant for those facilitating cross-border payments for digital goods, tech services and intellectual property rights.

Who is the taxpayer?

The key point of the dispute was whether the Brazilian user or the intermediary making the remittance out of Brazil liable for CIDE.

Apple Brazil collected the payments from Brazilian users of its media services platforms (App Store, iTunes, iCloud and the like, known as Apple Media Platform, “AMP”) on behalf of its U.S. parent and remitted part of these payments abroad. It treated all sales to the Brazilian users as direct sales made by its U.S. parent. Apple Brazil claimed that for CIDE to apply, it had to be a party to the agreement providing the importing of the intellectual property right to the end-user, which was not the case.

As such, Apple Brazil claimed to be a payment facilitator, operating under Brazil’s Central Bank regulations and merely tasked with processing payments on behalf of its U.S. parent.

In its view, it was not the contracting party, a user or a beneficiary of the imported services or intellectual property. If CARF accepted this argument, no CIDE would apply. However, the Federal Revenue Department – and, eventually, CARF – saw it differently.

The Plurality: Substance Over Form

CARF’s plurality held that Apple Brazil actively remitted payments to foreign beneficiaries in return for services rendered (or rights granted) to Brazilian users — and this was enough to trigger CIDE under article 2, paragraph 2^nd of Law 10,168/2000. Under this Law, CIDE is imposed on any person that “pays, credits, delivers, employs or remits royalties” to parties abroad, regardless of whether they are the end-user or contractual signatory.

The plurality relied on its own binding precedent (Súmula CARF 127), stating that CIDE applies to the import of technical services, even absent any transfer of technology.

In effect, the ruling decouples the incidence of CIDE from the legal relationship with the foreign provider, shifting the focus onto the economic substance of the remittance.

Not All Remittances Treated Equally

Apple Brazil tried to argue that the payments included software licences and other items available on the AMP were not subject to CIDE (such as shelf software and digital goods). But the tribunal dismissed this, citing a lack of granular evidence. Without clear segregation and documentation of each type of remittance, the entire sum was treated as taxable.

The CARF panel further stressed that while the end-consumers may be individuals (and thus not subject to CIDE), Apple Brazil’s role in facilitating, collecting and remitting those funds made it a key link in the taxable chain.

What this Decision Means for Importers of IPRs and Digital Services

This decision throws cold water on any digital platforms or local affiliates might have had about being “just facilitators”.

The takeaway is that if you are remitting funds abroad in connection with technical services, software licences, media content, or royalty-bearing IP rights, you may be held liable for CIDE, regardless of whether you are the end-user or formal licensee.

More critically:

• claiming exemption based on “pass-through” status is unlikely to shield you;
• documentation and classification of each remittance is key; and
• if you are withholding income tax on the remittances, you are effectively acknowledging they relate to services or royalties, which may increase the chances of CIDE being charged.

The Strategic Response

Multinationals and marketplaces must now re-evaluate:

• Their contract structures: Who is the true importer or beneficiary of the transaction?
• Their payment flows: Is the Brazilian entity just a courier of cash or something more?
• Their tax compliance: Is there sufficient evidence to distinguish taxable and non-taxable flows?

The Apple decision may not be the last word on the subject, as Apple Brazil has appealed, but it sends a loud and clear message to foreign content providers and their Brazilian counterparts: if value is created in Brazil and sent abroad, the Federal Revenue Department will be looking for its slice.

Questions?

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Last modified: 22 April 2025