IBJR requests the overturning of veto 49 on the article that exempted earnings of gamblers up to R$ 2,112

Technical Note 49/2023

Introduction

The text of Bill No. 3626-A/23, approved by the National Congress, meets international best practices and has been recognized in the global market as an example of modern legislation for the creation of a new sector in the national economy.

However, the IBJR views with concern the veto to the first three paragraphs of Article 31 of the project (items 49.23.001; 49.23.002; and 49.23.003 of VET 49/2023), which deals with the taxation of the player. This is because a change in the basis of calculation of the player's taxation will result in a poor user experience, discouraging them from remaining in the regulated market.

The natural consequence will be a drastic drop in investments by companies in the sector and a consequent negligible revenue collection by the Federal Government, frustrating not only the expectations of the entire production chain of the sector, including sponsored sports entities and media outlets, but also of the consumer market, which will remain unsupported.

Below, we detail the main problems arising from the veto.

Lack of definition for the concept of “net prize”

Item 49.23.001 of VET 49/2023 – § 1 of art. 31

For the purposes of this article, net prize is considered the positive result obtained in fixed quota bets made each year, after deducting losses incurred with bets of the same nature.

The veto to § 1 of art. 31 results in the absence of a clear definition of “net prize”, since the wording of the item is omitted. This omission generates uncertainties regarding the taxation of prizes obtained in fixed quota bets.

Several issues arise from the lack of definition, such as the need to deduct losses and costs from the prizes received, the period for calculating the net prize, and whether the calculation should be done globally or individualized for each betting platform.

Uncertainty regarding the application of the exemption

49.23.002 of VET 49/2023 – § 2 of art. 31

The tax referred to in the “caput” of this article will apply to net prizes that exceed the value of the first bracket of the annual progressive IRPF table.

The veto to § 2 of art. 31 also falls on the omission, this time of the application of the IRPF exemption bracket. This is because Law 14.790/23 does not clarify whether the Income Tax exemption applies to net prizes that do not exceed the first bracket of the monthly incidence table of the tax.

However, the general rule of article 56 of Law 11.941/09, which grants this exemption to prizes obtained in lotteries, is still in force. As fixed quota bets are a lottery modality and article 31 of Law 14.790/23 does not exclude the application of this exemption, it is necessary to clarify that the exemption also applies to these bets. The absence of this clarification may contribute to the legal insecurity of the sector.

Lack of definition regarding the definitive or anticipatory nature of the IRPF

49.23.003 of VET 49/2023 – § 3 of art. 31

The tax referred to in the “caput” of this article will be calculated annually and paid by the last business day of the month following the calculation.

The veto to § 3 of art. 31 generates another absence of definition. This refers to the definitive or anticipatory nature of the 15% Income Tax established by article 31 of Law 14.790/23. There is no clarity whether this tax should be considered in the Annual Adjustment Declaration (DAA) for refund or additional collection purposes.

The absence of specification in the legal provision generates uncertainty, since the legal system allows both modalities of tax incidence. Moreover, the taxation provided for in article 14 of Law 4.506/64, applicable to lotteries, is exclusive at the source and definitive. Therefore, it is necessary to clarify that the source taxation of fixed quota bets will be exclusive and definitive, as provided in article 14 of Law 4.506/64.”

Brazilian Institute for Responsible Gaming