The amendment presented by senator Alessandro Vieira (MDB-SE), vice-president of the CPI of ‘Bets’, and accepted by Eduardo Braga, aims to ensure that sports betting and iGaming are clearly included in taxation, combating tax evasion and increasing revenue.
The rapporteur's opinion provided that the tax on goods and services and the contribution on goods and services would be levied on prediction contests, both physically and virtually, including lotteries, fixed-odd bets and sweepstakes.
But it made a generic mention of prognosis competitions in the case of the selective tax, which could generate divergent interpretations and Vieira's amendment eliminates the gap.
The National Association of Games and Lotteries (ANJL) has already expressed concern regarding the possibility of implementing a “selective tax” (or “sin tax”) for the sports betting and online gaming market in the regulatory process of the Reform Tax. For them, the measure could render the entire sector regulation process ineffective, as it tends to encourage the illegal market.
Law 14,790/2023, which regulated this market, set a tax rate of 12% on Gross Gaming Revenue (GGR, i.e., the difference between the total volume of bets and the value of prizes paid) after intense coordination between the sector and to the National Congress.
Over the past year, ANJL demonstrated to congressmen, through studies and data, that a heavy tax burden (the original proposal predicted 18%) would only drive away serious betting houses that wish to operate in the country in a regulated manner and, at the same time, would cause illegal websites to proliferate even more in the country.
International examples show that the greater the weight of taxes, the less channeling through authorized sites and, therefore, the greater the channeling through irregular sites.
Considering the new taxes (IBS and CBS) foreseen in the Tax Reform, the sector's tax burden in Brazil should reach 32%, one of the highest in the world. This is without considering the millionaire payment of grants to the Union – and, depending on the operators' decision, to the states and the Federal District – and the incidence of 15% Income Tax on bettors' net prizes.
Chapter IV of the reform approved by the Senate is dedicated to lottery modalities, including sports betting, online games and fantasy sports:
CHAPTER IV: FORECASTING CONTESTS
Section I:
General Provisions
Art. 237. Betting contests, whether physical or virtual, including all lottery modalities, including fixed-odds bets and sweepstakes, horse racing bets and other bets, are subject to a specific system of incidence of IBS and CBS, in accordance with the provisions of this Chapter.
Sole paragraph. The provisions of this Chapter apply to fantasy sports.
Art. 238. The basis for calculating IBS and CBS on betting contests is the entity's own revenue resulting from this activity, corresponding to the proceeds of the collection, with the deduction of:
I - prizes paid; and
II - mandatory allocations by law to a public agency or fund and to other beneficiaries.
Art. 239. The IBS and CBS rates on betting contests are uniform nationwide and correspond to the sum of the reference rates of the federative spheres.
Art. 240. The credit of IBS and CBS to bettors in prediction contests is prohibited.
Art. 241. The prizes paid are not subject to the incidence of IBS and CBS.
Art. 242. The company that operates prediction contests must present an additional obligation, in accordance with the regulations, containing, at least, information about the place where the bet is made and the amounts of the bets and prizes paid.
Sole paragraph. If the bets are made virtually, the additional obligation referred to in the caput of this article must identify the bettor.
Section II:
Importation of Betting Competition Services
Art. 243. Entities domiciled abroad that provide, by virtual means, betting competition services as set forth in this Chapter to bettors resident or domiciled in the country will be subject to the IBS and CBS at the same rate as that set forth for betting competitions in the country.
§ 1º The provider of the service referred to in the caput of this article is the taxpayer of the IBS and CBS, and the bettor may be jointly liable for payment in the cases set forth in art. 21 of this Complementary Law.
§ 2º The calculation basis is the revenue earned by the entity due to the transaction, with the application of a reduction factor provided for in the regulation, calculated based on deductions from the calculation basis for forecasting contest services in the country.
§ 3º The provisions of Chapter IV of Title I of this Book apply to the imports covered by this Section, insofar as they do not conflict with the provisions of this article.
Section III:
On the Export of Forecasting Contest Services
Art. 244. Forecasting contest services provided, virtually, to residents or domiciled abroad shall be considered exported, being exempt from the incidence of IBS and CBS, for the purposes of the provisions of Chapter V of Title I of this Book.
§ 1º The regulation shall provide for the form of proof of residence or domicile abroad for the purposes of the provisions of the caput of this article.
§ 2º Forecasting contest services provided in the presence, in the national territory, of a resident or domiciled abroad shall not be considered exported.
Source: GMB
