Tech Roundup: Supreme Court makes landmark decision on software taxation

You’re reading The Brazilian Report’s weekly tech roundup, a digest of the most important news on technology and innovation in Brazil. This week’s topics: Brazil’s Supreme Court decision on software taxation, Disney+ and Globoplay partner up in the local streaming market, and the rise of mobile phone contracts in Brazil. 

A landmark Supreme Court decision on software taxation

The Brazilian Supreme Court has reached a majority against charging state goods and services tax (ICMS) on software products. The trial will continue throughout next week, but the six-justice majority makes the landmark decision all but a certainty, ending a decades-long dispute. Sector players say the ruling paves the way for more investments and legal security for emerging technologies, such as cloud computing and artificial intelligence.

Understanding the case. Brazilian law considers the development and licensing of software as services and, therefore, subject to municipal services tax ISS. Some states, however, say software is a product — which would force companies to pay the state-level ICMS, which charges a higher rate. In São Paulo, local courts considered this move unconstitutional, and the Supreme Court will now establish a rule for the entire country.

• Justices heard two similar lawsuits challenging ICMS charges by the states of Mato Grosso and Minas Gerais. The first was filed in 1999, when software was still sold on...