The should produce tax neutrality between banks and fintechs as early as 2027, with the implementation of the Contribution on Goods and Services (CBS), a federal tax replacing PIS and Cofins. For Paula Zugaib Destruti, an associate at the Pinheiro Neto office, the change equalizes not only the tax burden, but the industry relationship itself.
“It will be very important, because the tax system will no longer encourage verticalization. It will allow new partners to enter the industry”, explained the lawyer at an event on fintech taxation at Pinheiro Neto. “Sometimes the institution was unable, due to having a price, to fit into a certain technological solution. There was a fiscal inefficiency. Now it will be possible.”
When the first payment institutions dedicated to issuing credit cards started to become a good distribution channel, about a decade ago, they needed to look for an alternative to sell new credit services. Due to , the solution was to close partnerships with banks with the necessary regulations.
It turns out that these structures, called “surrogacy”, generate tax inefficiency. After a certain product is sold by a fintech, the amount goes to the licensed bank. From there, the bank’s own rate and taxes are deducted: ISS, PIS and Cofins. The majority of the amount charged for the service remains, including discounts, passed on to the fintech and subject to the same taxes again.
The reform reduces the effect of this double taxation, because the tax paid by one party can be credited by the other. “The sum of the bank’s load plus fintech will be the same as that of fintech if it were operating alone”, explains Destructi.
Many fintechs are looking for the “surrogacy” model to accelerate their entry into the market. This movement, however, was already bigger. Since the emergence of alternatives such as Direct Credit Societies (SCDs), there has been a dilution in the search for this type of structure, especially for players who wish to enter the financial market directly.
Continues after advertising
“Surrogacy exists much more in the case of companies that are not in the financial market, in the banking market. They do not necessarily want to enter this market, because it is not their main business, but they want to offer a product that suits them”, explains the lawyer. Retailers offering financial services are some of the emblematic cases.
A tax system like this, argues the expert, allows new partners to enter the industry and generate more competition. “The industry itself, its muscles, alignment of participants, can improve while these tax inefficiencies are progressively eliminated.”
The tax reform will replace the Service Tax (ISS) charged by municipalities, and the Tax on Circulation of Goods and Services (ICMS) with the Tax on Goods and Services (IBS) from 2029. Federal taxes, PIS and Cofins, are replaced by CBS from 2027.
Continues after advertising
From this second tax comes the expectation of neutralization between the rates for the two different types of institution, while in the case of the ISS the taxation is already the same.
“When a fintech provides a payment service, it is subject to PIS/Cofins at a rate of 9.25%. A bank, when providing the same service, is subject to a rate of 4.65%”, explains Destruti. Unlike banks, however, fintechs can eliminate expenses related to technology and marketing, for example, from the calculation base.
The disparity in taxation between banks and fintechs, explains Destructi, may vary according to the products offered and their cost composition. A payment institution with lower margins, after taking credit for technology and marketing expenses, can reduce its base to a rate similar to that of the bank. Some with greater profitability would find a higher tax rate.
