Brazil revenue service confirms tax rate on gambling winnings

Personal income tax will be charged on winnings over €500.

Brazil.- Robinson Sakiyama Barreirinhas, general secretary of Brazil’s federal revenue service, the RFB, has signed off on a 15 per cent income tax rate for winnings from betting, online gambling and lotteries. The rate will apply to net winnings of over BRL 2824 (around €500). There will be no tax on winnings below this figure, which is around two average monthly salaries.

The tax will be deducted at source, the same mechanism used for state lotteries. Net winnings will be defined as the amount won over the amount wagered. The changes will be added to Brazil’s federal tax laws and Declaration of Income Tax Withheld at Source (DIRF).

The trade association ANJL had lobbied for the removal of the proposed tax on winnings. Pressure to adjust the tax rate on gambling operators was successful, leading the government to reduce the proposed rate from 18 per cent to 12 per cent in a bid to ensure a competitive market. However, the tax rate on winnings will remain at the rate proposed by Bill No. 3,626/2023, which was signed by President Lula da Silva in December.

Brazil sports betting regulatory timeline

The Brazilian Ministry of Finance of Brazil has appointed Régis Anderson Dudena to lead the country’s new gambling regulator. The legal scholar and government advisor will be the first president of the Secretaria de Prêmios e Apostas (SPA).

The SPA is advancing with its phased timeline for the introduction of the regulatory framework for sports betting in Brazil. Last month, it published ordinances related to payment rules. Phase two this month will involve further ordinances on money laundering and crime prevention and rules related to customer rights.

Phase three in June will see the publication of ordinances on technical and security requirements for online gaming, monitoring and supervisory rules and sanctions for breaches in the lottery sector. Finally, in July, phase four would see ordinances on responsible gambling.

At the end of last year, the Ministry of Finance said it had received expressions of interest from 134 operators interested in gaining licences for the Brazilian gambling market.