You've probably already subscribed to an internet or telephone service, and along with it you're entitled to email accounts, document storage, browsing protection, unlimited social media, among many others. These additional services are called Value-Added Services (VAS).
According to Anatel , Value Added Service (VAS) is any and all service provision that is ancillary to telecommunications activity. In turn, telecommunications companies are those that provide fixed telephony , fixed internet , mobile telephony and .
Typically implemented as extra services by telephone and internet providers, their function is to offer additional experiences to the customer, such as antivirus software , video and audio streaming , unlimited access to social networks, among many others.
services (VAS) can serve various strategies in telecommunications companies, as they do not fall under the General Telecommunications Law ( No. 9,472/1997 ), since they are experiences that go beyond the voice or internet service offered, in addition to enabling various differentiation strategies from competitors, such as the creation of new service packages , special offers , churn reduction , among many others.
With the arrival of the pandemic, the use of VAS (Value Added Services) by internet providers increased considerably. A large part of the population is looking for new forms of entertainment and leisure in their homes, making streaming services and social networks relevant factors for contracting internet plans with additional services of this type.
Tax implications for VAS (Value Added Tax)
One of the major factors driving demand for telecommunications services through VAS (Value Added Services) providers is the low tax burden on these services.
Unlike the Multimedia Communication Service (SCM), the taxation of VAS (Value Added Services) is governed solely by the federal agency and is not subject to state tax regulations, such as ICMS . In other words, the tax amounts paid by VAS are considerably lower than those paid by SCM, making it attractive for telecommunications companies to reduce costs.
In addition to the benefits offered to the subscriber, and also to the provider, for strategic reasons of sales and customer loyalty, VAS (Value Added Services) can also be beneficial in terms of revenue and profitability for the company.
What is the difference between SVA and SCM?
The debate about the difference between VAS (Value Added Service) and SCM (Multimedia Communication Service) is still ongoing among managers of telecommunications companies.
The concern stems from the fact that the separation of services in 2017 caused a stir because, according to Anatel, the tax burden on the services would be different, but it was not yet possible to define exactly whether an added service would be classified as SVA or SCM.
However, legal counsel was hired at the time to add services to subscribers' bills, in order to avoid problems with Anatel (the Brazilian telecommunications regulatory agency).
Multimedia Communication Service (SCM), according to the General Telecommunications Law, is understood as Ministry of Communications . Regarding tax implications, SCM is subject to state tax regulations for the Tax on the Circulation of Goods and Services (ICMS).
Value-Added Service (VAS), as defined in article 61 of the LGT , is the activity that adds new utilities related to the access, storage, presentation, movement, or retrieval of information to a supporting telecommunications service.
SVA is not a telecommunications service, therefore it is considered a support service for SCM .
VAS (Value Added Services) is not regulated by Anatel (Brazilian National Telecommunications Agency), does not require its authorization, and is subject only to federal taxes. Because of its lower taxation compared to SCM (Multimedia Communication Service), VAS becomes so attractive and widely used by Internet Service Providers (ISPs).
To conclude
I hope this article has helped to clear up your doubts about Value Added Services, and perhaps it can serve as a guide for choosing a suitable VAS for your company.
Remember: Value-Added Services (VAS) can bring great benefits when implemented correctly and strategically planned. Pay attention to regulations and taxes to avoid fiscal problems.
In the coming days we will be publishing several articles on the subject, covering topics such as:
- Why do providers look for VAS (Value Added Services)?
- What are the benefits of owning a VAS (Value Added Service)?
- How to choose a tax audit firm for VAT-based SVAs
- Billing strategy with VAS packages
- Useful VAS tips for internet service providers (ISPs)
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Until next time!
