The CAE (Commission on Economic Affairs) of the Senate approved a bill that provides for the collection of the municipal tax ISS (Service Tax) on the exploitation of electronic games. The text involves online activities considered skillful, such as poker, and may include gambling, such as betting on any sporting competition, if exploitation is legal in Brazil. The matter now goes to the House plenary for analysis.
The ISS is a municipal tax and it is up to each city — or the Federal District — to decide the value of the collection rate, between the limits of 2% to 5%. According to the project, in the case of taxation of competitions and events involving eSports and e-games, instead of being collected in the municipality where the establishment providing the service is located, it will be collected in the municipality where the service taker's (user) domicile is.
Rapporteur of the project, Senator Jacques Wagner (PT-BA) pointed out that, although the text is broad and allows the collection of taxes on gambling, this activity is not allowed in Brazil. Therefore, at the moment, when talking about electronic games, the project refers only to skill games. In February, the Chamber approved a project that legalizes the exploitation of gambling in Brazil. The proposal still needs to pass the Senate.
Author of the project, Senator Flávio Arns (Podes-PR) maintained that there is a growing use of virtual platforms for the practice of electronic games, which has moved large amounts of money. The practice, he pointed out, has been on the sidelines of taxation.
“It is known that the informality of ISS taxpayers as a result of technological advances and the lack of updating of legal tax rules make inspection difficult and compromise potential collection. Internet operations have been routine for a long time, which has led to the emergence of new service providers, especially in electronic entertainment activities. However, legislation is not always able to keep up with new technologies,” highlighted Arns in the project.
The project states that games of skill are those in which "the result is determined by the mental or physical abilities of the person who participates in them, such as strength, dexterity, expertise, intelligence and mastery of knowledge and rules of games, in which the decision of who wins or who loses depends mainly on the player's decision," said the rapporteur.
The senator said that "poker and chess examples of mental games are poker and chess, and of dexterity games, all that depend on skill with the control (joystick)". The parliamentarian stated that, when organizing a physical or online event, the person responsible is entitled to remuneration based on the amounts paid at registration and can also receive a percentage of the purchases of credits by the participants.
Commission
In the report favorable to the project, Senator Jaques Wagner (PT-BA) argued that electronic game organizers receive funds from the amounts paid, for example, for registration or in exchange for fictitious value chips with the objective of disputing cash prizes.
It is on this kind of “commission” received by the organizers of the games that the ISS, a municipal tax, must be levied. Also according to the proposal, the tax should be shared between the municipalities where each of the online players lives, instead of being collected at the place where the service provider is located.
In the opinion, the rapporteur stressed that the effectiveness of the proposal depends on an ordinary law that obliges the administrator to identify the players and unifies the other obligations to be fulfilled by the administrator of the electronic platform at the national level. The measure, highlighted Jaques Wagner, does not cause a loss of revenue for the Union, nor does it increase expenses.
Source: GMB
