SBC News Player taxes on Brazil Bets make a distinction on licensed & unlicensed winnings

Player taxes on Brazil Bets make a distinction on licensed & unlicensed winnings

Guidelines on Personal Income Tax (IRPF) have been updated for Brazilian citizens to register prizes and winnings from online gambling and sports betting activities.

Receita Federal, the Federal Revenue Service of Brazil, has updated articles of its “General Coordination of Taxation” to include new provisions for consumers to declare profits/winnings generated from online gambling.

An update to the IRPF guidelines was required to address ambiguities in current legislation and align broader efforts to regulate and standardise taxes on gambling-related income in Brazil, following the launch of the Bets market on 1 January 2025.

Mandated by Law No. 14,790/2023, the legislative framework of the Bets regime requires a 15% tax to be imposed on player prizes/winnings exceeding the threshold of BRL 2,824 (approximately €530). The tax on player prizes was enforced by President Lula da Silva in the final revision of the bill prior to its federal sign-off.

New IRPF guidelines state that tax collection on player prizes will be “taken at source” by Bets-licensed operators, who must apply deductions on gross winnings accrued on a monthly basis from individual customers.

For operators licensed under the Bets regime, taxes on prizes and winnings will be treated as an advance payment of a customer’s annual income tax declaration. However, the guidelines highlight that it is the customer’s responsibility to keep track of winnings for accurate reporting in their annual declaration.

Lion’s Booklet must be applied to unlicensed winnings 

Receita Federal has determined that individual winnings and prizes generated from international operators will be subject to taxes under its Carnê-Leão framework. Known as the “Lion’s Booklet,” Carnê-Leão is the tax registry for Brazilian citizens and residents who receive personal income from abroad, such as payments, business revenue, pensions, investments, and properties.

IRPF disclosures and payments must be conducted by the individual player, as international winnings cannot be taxed at source because operators are outside Receita Federal’s jurisdiction. Taxes on international winnings must, therefore, be calculated and reported as individual income using the Carnê-Leão progressive income tax table. For the fiscal year 2024/2025, Carnê-Leão applies the following tax thresholds:

SBC News Player taxes on Brazil Bets make a distinction on licensed & unlicensed winnings

Receita Federal warns that individuals must take on full responsibility of self-reporting and paying taxes submitted to the Carnê-Leão system by the end of each month. The framework ensures that all income from online gambling, regardless of its origin, will be subject to taxation.

Matching guidelines with domestic winnings, taxes paid via Carnê-Leão are credited toward the player’s total tax liability in their annual declaration.

SBC News Player taxes on Brazil Bets make a distinction on licensed & unlicensed winnings

Lottery Prizes and Compliance Rulings

A further determination has been applied to fixed-odds lottery winnings, which will be subject to a 15% flat tax on net prizes exceeding BRL 28,559.70 (€4,606). The tax is calculated annually and must be paid by the last business day of the month following the calculation.

Individuals engaging in online gambling are not allowed to deduct betting expenses or losses from other bets when calculating taxable amounts. Operators are responsible for reporting all taxes deducted at source to Receita Federal, ensuring the transparency and accountability of gambling transactions.

SBC News Player taxes on Brazil Bets make a distinction on licensed & unlicensed winnings
Ana Pamplona
Legal View: “Bets still requires a legal determination to tax player winnings” 

Ana Pamplona, a partner at Ana Helena Karnas Hoefel Pamplona Advocacia, provided further details to SBC Notícias on the interpretation of IRPF changes.

The lawyer explained that the changes have been applied as a consultation notice under Federal Income Tax Regulatory Instruction No. 2,058, issued on 9 December 2021, which aims to resolve wider “ambiguities in tax legislation in Brazil, which are binding for those who consult them.”

Observing discrepancies, Pamplona noted that despite the consultation the taxation of gamblers remains a challenge, as the existing Normative Instruction No. 2,191 of 6 May 2024 faces issues following the National Congress’s revocation of “certain presidential vetoes”.

“The intention of the Federal Treasury had to change due to the position of the parliamentarians. The response given in the solution was already in the sense of adapting to current standards—that is, with an annual contribution and a rate of 15% was applied to winnings.”

As such, the government and related agencies will need to provide a new “regulatory instruction” to address ambiguities and clarify aspects related to tax collection, sources, consumer rights and auditing duties.

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