A proposed legislation in the Chamber of Deputies may lead to notable alterations in on-demand video services like Netflix and YouTube’s movie store in Brazil. The bill aims to regulate these services and introduce the Contribution to the Development of the National Cinematic Industry (Condecine) to support local cinema.
The camera examines a program that seeks to evaluate YouTube and Netflix.
The project authored by Senator Nelsinho Trad (PSD-MS) modifies the Provisional Measure 2228/01 and the Pay TV Act, subjecting VoD services to principles such as artistic freedom, cultural diversity, and the promotion of Brazilian audiovisual content.
The project also places various responsibilities on streaming platforms.
- To ensure a consistent presence of Brazilian audiovisual content in the catalog, a minimum quantity will be included based on the catalogue size (e.g., for a catalogue with two thousand products, at least 100 should be Brazilian).
- To provide Ancine with documentation regarding the invoicing and cataloging of Brazilian audiovisual material.
- Television equipment makers must refrain from engaging in anti-competitive behavior when providing content on their platforms.
- VoD service providers that fail to meet their obligations will receive warnings and fines, including daily fines as determined by Ancine.
How will the calculation be carried out?
The bill’s text specifies that the Condecine will be levied yearly with increasing rates depending on the companies’ revenue. The regulations are as outlined below:
- Companies that invoice more than R$ 96 million will be subject to a 3% rate.
- Companies with invoicing ranging from R$ 4.8 million to R$ 96 million will be charged a fee of 1.5%.
- Services costing less than R $ 4.8 million will be exempt from tax payment.
The tax will be cut in half if half of the service catalog’s content is from the country. Companies need to differentiate profits from streaming services from other services like advertising and sports content to determine the tax. Educational journalism and audiovisual content will not be subject to Condecine.
What should be done next?
The project will undergo a thorough analysis by the Committees of Culture, Communication, Finance and Taxation, and Constitution and Justice. If there are modifications, it will go back to the Senate for another vote; otherwise, it will proceed to receive presidential approval.
