Brazil Introduces New Auditing and Taxation Rules for Bets Operators

Brazil’s Secretariat of Prizes and Betting (SPA) has released a new ‘technical notice’ detailing the requirements for auditing and reporting income for licensed operators under the Brazil Bets regime. Technical Notice No. 299 establishes the SPA’s regulations for Bets-licensed operators regarding the submission of audited financial accounts and the calculation method for Gross Gaming Revenue (GGR). According to the notice, GGR must be calculated using the following formula: Total revenue from bets – (Prizes paid to winners + Income tax on prizes).

The SPA emphasized the necessity of operators adhering to GGR standards, as tax revenues collected from Bets operators will be allocated to various social programs as mandated by Law No. 14,790/2023, which governs the Bets regime. Starting from 1 January 2025, Brazil-licensed operators will be subject to a 12% tax on GGR income. Additionally, the GGR calculation will determine the tax collection responsibilities for COFINS, PIS, and ISS.

Regarding GGR and corporate taxes, the Social Assistance Contribution (COFINS) is a federal tax imposed monthly, calculated as a percentage of revenue, and set at 7.6%. The Contribution to the Social Integration Program (PIS) is another federal social contribution, also calculated monthly, with a tax rate of 1.65%. The Municipal Service Tax (ISS), applicable once implemented, is a municipal tax that varies by location, typically ranging between 2% and 5%. Furthermore, operators must pay a monthly oversight fee to the SPA, which ranges from BRL 54,419.56 to BRL 1,944,000.00, depending on the monthly GGR.

The tax revenue from the Bets regime will be allocated to various organizations and initiatives. Federal sports will receive a portion, with 7.30% directed to entities within the National Sports System and athletes, 2.20% to the Brazilian Olympic Committee (COB) to support Olympic sports and athletes, 1.30% to the Brazilian Paralympic Committee (CPB) for Paralympic sports and athletes, 0.70% to the Brazilian Club Committee (CBC) to promote sports at the club level, 0.50% to the Brazilian School Sports Confederation (CBDE) for school-level sports, 0.50% to the Brazilian University Sports Confederation (CBDU) for university-level sports, and 0.30% to the Brazilian Paralympic Club Committee (CBCP) supporting Paralympic sports clubs.

Additionally, civil society organizations will benefit from the tax revenue, with 0.20% allocated to Fenapaes (National Federation of APAEs), which provides support for individuals with disabilities, 0.20% to Fenapestalozzi, which offers educational, health, and social services for people with disabilities, and 0.10% to the Brazilian Red Cross, which provides humanitarian aid and emergency assistance.

Operators will be required to submit their audited accounts on a monthly basis through SIGAP, the management system for Bets licenses. The SPA has committed to continually assessing and recommending improvements in reporting requirements for licensed operators, aiming to “improve its accuracy and oversight of the market on key duties.” Taxation within the Bets regime remains an ongoing matter, as in 2025, the Senate will hold hearings to consider whether to impose selective taxes on online gambling operators. Senator Eduardo Braga has proposed the implementation of ‘sin taxes’ on gambling businesses as part of his broader review of federal tax policies for the Senate.

By fLEXI tEAM