While the French players had the glory of winning the World Cup last Sunday (15/07), an even bigger group of people were equally lucky: those who hit the winner of Russia 2018 or, therefore, the exact score of the final of the championship. The latter may have seen their money multiply to some extent on online gambling sites or virtual bucks.
This money, according to the Federal Revenue Service, should be registered as capital gain, subject to the Individual Income Tax (IRPF).
The understanding of Revenue is set out in Consultation Solution # 61/2018, published in the Federal Official Gazette at the end of May. The document responds to the questioning of a taxpayer who placed bets on an international website, and, without finding any clarification on Revenue’s website about the possible need to tax the value, resorted to a consultation with the agency.
The individual says that during some months of 2016 there was a "big move" in his checking account due to deposits and redemptions related to the betting site. The taxpayer further states that "in most of the months he got more losses than gains on bets placed."
In response, Revenue stated that "income received from abroad by individuals resident in Brazil as a result of gains in online betting is subject to taxation in the form of a mandatory monthly payment in the month of receipt." The argument is that Article 43 of the National Tax Code (CTN) defines that the Income Tax originates "in favor of any nature".
"From all of the above, it is verified that the income earned by the consultant in the aforementioned betting site is included as income received from abroad by individuals resident in Brazil and must be taxed," says the Consultation Solution, "since there is no own exemption."
The amount earned with such bonuses should also be part of the taxpayer's Annual Declaration of Contribution (DAA), and the total amount collected monthly is classified as an advance of the amount calculated in the declaration. Also according to the Internal Revenue Service, there is no legal provision to deduct losses recorded in online betting.
A Consultation Solution - a device used by the Internal Revenue Service to solve taxpayer doubts - links only the individual or legal entity that has questioned it. The text, however, can influence other taxpayers to make their own decisions.
Discouragement
According to the tax partner of Menezes and Niebuhr Advogados Associados, Rodrigo Schwartz Holanda, the Revenue position discourages the development of the activity in the country. "It is worth remembering that what moves the player is the continuous 'lose and win', coupled with the expectation that the gains will be greater than the losses," said the tax consultant.
"Except for the exceptions where the player bets little and earns a lot, people who go to gambling houses with the spirit of profit - and not just for entertainment - will be discouraged from rolling the dice, since by taxing winnings without consider the losses, the result of the bets should also exceed the Tax to be worth, "argued the lawyer.
According to Schwartz Holanda, the Brazilian legislature, when considering a regulatory legislation for the subject in Brazil, should contemplate the tax consequences that this category of bets can bring to the public coffers.
Source: GMB / Jota
