The collection of taxes on betting companies based abroad, but operating in Brazil, continues to be a challenge, as pointed out by the special secretary of the Federal Revenue of Brazil, Robinson Barreirinhas. At the Betting CPI, Barreirinhas highlighted that, from January 1, 2025, betting companies, known as bets, will need to establish a legal presence in Brazil.
This measure will facilitate inspection. Furthermore, the secretary mentioned that some companies simulate control abroad, but, in reality, Brazilians manage them.
“In this case, there is no doubt that we will charge.” He also highlighted that fraud is already being investigated, reinforcing the need for effective supervision to control the sector.
The impact of Law 14,790 of 2023
Law 14,790, sanctioned in 2023, brought a significant advance to the taxation model in Brazil. Barreirinhas stated that the legal presence of companies in the country will result in a “leap in quality” in inspection and tax collection.
Legislation approved in Congress provides for the obligation for these companies to have a legal representative in Brazil. In other words, this will allow direct dialogue with the government and facilitate the collection of taxes.
Barreirinhas pointed out that this discussion is global, since several countries face the challenge of taxing transnational activities made possible by the internet. “The whole world is debating how to deal, in the virtual environment, with an increasingly intense provision of services and exchange of goods,” he said.
International cooperation and supervision
To deal with the challenge of taxation of transnational companies, Brazil has followed a movement of international cooperation between tax bodies. This coordination seeks to promote the exchange of financial information, essential for the effective implementation of tax laws.
According to the secretary, “we are following a global movement of coordination between tax authorities so that there is cooperation in exchanging information related to financial transactions”.
The Federal Revenue already has access to the accreditation data of betting companies submitted to the Secretariat of Prizes and Bets. This data, according to Barreirinhas, will be shared to assist in inspection.
“The system will necessarily be shared with the Federal Revenue in relation to data necessary for collecting the tax”, he added.
Separate challenge in the Betting CPI
Although the IRS focuses on monitoring companies, the taxation of bettors was also discussed. Barreirinhas stated that the expectation is to tax “practically nothing” on bettors, as the majority lose more than they win.
However, Congress overturned the veto, making it difficult to collect taxes on gamblers. “The fact is that the way this law was made, with the overturning of the veto, basically makes any tax collection in relation to the bettor unfeasible,” stated the secretary.
The oversight of large numbers of bettors was mentioned as an obstacle. Many of these bettors have low incomes or are within the income tax exemption range.
Therefore, Barreirinhas highlighted that the Revenue will depend on the data provided by betting companies to be effective. This will be essential, especially with regard to financial transactions linked to bettors’ CPFs.
Other topics covered in the Betting CPI
Another topic addressed in the Betting CPI was tax evasion in exchange transactions between bettors in Brazil and betting companies abroad. Senator Carlos Portinho questioned the supervision of these operations, suggesting that payment companies, by keeping resources in Brazil, avoid sending remittances abroad, which could constitute tax evasion.
Barreirinhas acknowledged that this practice is common in online businesses, but highlighted that “not that it is necessarily illegal, but if there is a company in Brazil receiving and paying, it has to pay taxes”. He added that, in some cases, there may also be a violation of foreign exchange legislation.
Fiscal and technological actions
Barreirinhas defended the work of the Federal Revenue Service in combating tax evasion and organized crime. Furthermore, he highlighted the importance of the Financial Activities Control Council (Coaf) in monitoring atypical financial movements.
He mentioned that, from January 2025, the IRS will have access to more information and will be able to carry out even more rigorous inspections.
When responding to Senator Styvenson Valentim, who questioned the effectiveness of the inspection, the secretary reiterated that the IRS is committed to tackling organized crime. However, he stated that the Revenue’s participation is not always disclosed to the press, which can give the impression of inefficiency.
