The special appeal contradicts the decision of the Court of Justice of Rio de Janeiro, which was based on the jurisprudence of the STJ on the same case to conclude that “the exploitation of gambling is a service and is taxable in the form of municipal law, whether when selling bets it is done by the turf entity itself, whether it is done by third parties.”
The case reporter is Minister Gilmar Mendes. In the general repercussion admission trial, he identified two constitutional issues to be debated.
The first consists of knowing if the incidence of ISS on the exploitation of betting activities, such as the sale of tickets, bets or betting coupons, is constitutional, as provided for in item 19 of the List of Services Attached to Complementary Law 116/03 and in the previous legislation, Decree-Law 406/68, in items 60 and 61, according to the wording given by Complementary Law 56, of 1987.
The second question is whether, as the gaming exploitation activity is included in the service concept, the tax calculation base may include the full value of the bet or should fall only on the value of tickets or entries.
For the Jockey Club, the measure has a confiscatory character and violates the Constitution, since the calculation basis adopted - the betting movement - is inherent to Income Tax, which is the responsibility of the Union. It adds that the sale of betting tickets does not have to be considered service provision. Thus, the municipal tax could only apply to the admission fee paid by spectators to access the racecourse.
The city has the opposite position and indicates that bets are the qualified ticket for entertainment. In manifestation, the Attorney General's Office points out that the exploitation of games in general is compatible with the expression services, in the definition that the legislator intended.
“Betting management is one of the main sources that fuel the commercial exploitation of equestrian sports competitions and allows the spectator to actively participate in the races. The actual value of the bets fits into the normative price forecast, which, in the end, implies the collection of part of the amount for the benefit of the applicant,” says the statement of the entity.
In previous cases considered by the Supreme Federal Court, the position was to admit the levy of tax on tickets sold to racetrack attendees, but not on the income of the bets. The precedents are from the 1980s, while the current situation is new and with new developments.
The result is of interest to other prefectures and may mean a path to be followed by the court in relation to the betting market in Brazil - mainly online betting, in which the regulars obviously do not attend and pay admission for the physical location.
Source: Consultor Jurídico
