The government of Brazil has taken a final decision regarding the taxation of sports betting, both for companies and players. Following the provisional measure formulated by the Ministry of Finance, gamblers will now have to pay a tax burden of 30% on the amounts received as a prize during sporting events.
However, an exemption will be granted for prizes that fall within the Income Tax-free income range, which is currently R$ 1,903.98. Companies that operate in the sports betting sector will be required to pay a fee of R$ 30 million to the federal government to obtain a license valid for five years and to bear a tax burden of 15% on profit, after the distribution of profits. prizes.
Additionally, companies will also be required to have their headquarters in Brazil, have Brazilian employees and maintain a minimum share capital of R$100,000. Both companies that market sports betting and those that provide means of payment will have to be accredited by the government.
The sports betting scene in Brazil
Although sports betting was legalized in Brazil in 2018, it has not yet been properly regulated and taxed, as it operates in a market that the Ministry of Finance classifies as “grey”, with the possibility of manipulation of results and movement of money in tax havens.
By taxing sports betting, the government hopes to increase revenue and meet the targets of the new fiscal framework that will replace the public spending cap. The Ministry of Finance estimates that this taxation will result in an annual collection of R$ 12 billion to R$ 15 billion.
The Ministry of Finance’s special advisor, José Francisco Manssur, commented that “from the moment of regulation, betting outside Brazil will be illegal. We will have efficient means and the aim is to have the English index of 87% of hosted and legalized betting sites in Brazil. Don’t be suspicious of the capacity of the Brazilian state to curb illegality. We are going to curb illegality.”
The provisional measure is expected to be signed later this month of April. Taxation of sports betting is one of the government’s strategies to increase revenue and combat illegality in the sports betting market.
