The tax rate has been confirmed through new legislation and federal regulations
The Federal Revenue Service (RFB) of Brazil has introduced the tax framework for online gambling winnings ahead of the highly anticipated launch of the country’s regulated Bets market. Projected to be the biggest markets in Latin America, the final outcome could be decided by the tax implications.
The agency recently confirmed that personal income tax (IRPF) will be added to ‘net prizes’ gained from betting on lotteries and online gambling.
The RFB authorized the government’s 15% tax on winnings above BRL 2824 (about $550), with anything less than that being exempt. This amount reportedly equals about two months’ wages for the average Brazilian resident.
Winners are required to pay the 15% tax ‘at source’ when claiming their prizes. The new law changes federal tax regulations in the Income Tax on Individuals (IRPF) and the Declaration of Income Tax Withheld at Source (DIRF) after it was approved by RFB General Secretary Robinson Sakiyama Barreirinhas.
President Lula da Silva proposed the legislation after endorsing Bill No. 3,626/2023, which approves sports betting and online casino gaming.
Brazil’s National Association of Games and Lotteries, ANJL, implored the government to lower the “tax burden on players” before the market launch. They believe this is essential to promoting market competition and upholding the integrity of licensed gaming providers.
The ANJL cautioned the PT government “that international experiences show that taxing users encourages clandestine gambling.” That is why they called to ‘adjust the details to ensure the sustainable development of this promising sector.”
Operators must pay a 12% tax on gaming revenue and a five-year licensing fee of BRL 30m (about $5.84 million).
Before the Bets market launches, the Secretariat of Betting and Prizes must finalize technical regulations on security, payments, safe gambling and crime prevention. The Brazilian government also introduced ‘Normative Ordinances’ banning operators from offering bonuses and free bet promotions.
