Brazil sports betting tax rate dropped to 12 per cent tax rate
The final rate is a reduction from the proposed 18 per cent.
Brazil.- The Economic Affairs Commission (CAE) has green-lighted Bill 3,626/23, setting a reduced 12 per cent tax rate for sports betting in Brazil. The bill will now go to a delayed Senate plenary vote on November 28, which could approve online gambling as well as sports betting.
The CAE approved an amended tax framework put forward by former rapporteur Adolfo Viana of the PSDB. That sets a 12 per cent tax on licensed operators and a 15 per cent tax on player prizes. Both of those rates are lower than the 18 per cent and 30 per cent rates put forward by the Ministry of Finance.
The CAE deemed that the lower tax rates were necessary to attract consumers and businesses to the new regulated federal sports betting market. The 12 per cent charged to licensed operators will include the deduction of customer winnings and taxes on player prizes.
Viana had also proposed the addition of igaming to the bill in September, somewhat surprisingly. The Chamber of Deputies approved the text and it now has the CAE’s approval, but the bill will go back to the Chamber of Deputies after the Senate either approves it or makes changes. Senators Eduardo Girão and Carlos Portinho have opposed the inclusion of online casino.
The CAE also approved the Ministry of Finance’s proposal to charge BRL 30m (€5.5m) for five-year licences, each valid for three brands. Operators must have a domiciled business in Brazil, in which a Brazilian partner must hold 20 per cent of share capital. They must also pay regional income taxes.
Tax will be distributed as follows: 10 per cent to the Ministry of Education; 14 per cent to public security, including the National Public Security Fund and Sisfron, 36 per cent to Brazil’s Ministry of Sports (to share among sports organisations, national bodies and charities), 28 per cent to tourism (Embratur and the Ministry of Tourism), 1 per cent to the Ministry of Health, 0.5 per cent to civil society agencies (Fenapes and Fena Pestalozzi) and 0.5 per cent to the Federal Police operational fund. Oversight of taxation will be the responsbility of the Ministry of Finance.
For the taxation of player prizes, operators will need to register customer winnings through Brazil’s Personal Income Tax (IRPF) registry. Taxes will be charged on a yearly basis with winnings of less than BRL 2,112 (€400) exempt. Players will have 90 days to claim prizes, and unclaimed winnings will go to education and disaster relief funds.
Brazilian football clubs oppose restrictions on gambling sponsorship
Meanwhile, football clubs have signed a petition opposing a proposed amendment to Brazil’s sports betting bill PL 3626/2023. Amendment 38-U put forward by Senator Eduardo Girão and supported by the Senate Sports Committee would prohibit sports betting sponsorships for teams, individuals and championships.
Some 34 professional football clubs, including teams in Brazilian Football League (Libra) and the Liga Forte União (LFU), have signed a petition calling for the Senate to reject the proposal, which would also ban former athletes, referees, technical staff and federations from entering into sponsorship deals and would limit broadcast and social media advertising to between midnight and 6am. Advertisements in sports arenas would also be banned.
