MIÉ 15 DE JULIO DE 2020 - 03:01hs.
Opinion – Witoldo Hendrich Jr, lawyer

Dep. Evandro Roman suggests excluding betting prizes from the tax calculation base

Brazil's government issued PM 984/2020 a few weeks ago that takes care of the “financial health” of football teams. During the analysis by Congress, Federal Deputy Evandro Roman sent a draft amendment of enormous relevance. He suggests excluding prizes from the tax calculation base, shedding more light on taxation on the GGR. “This aligns the calculation basis to the reality of the operation and to the best international fixed-odds betting practices,” explains lawyer Witoldo Hendrich Junior in this exclusive column for Games Magazine Brasil.

Dear friends of GMB,

Today's brief column is much more a status update about important changes happening in Brasilia than the usual opinion on a specific subject.

The Federal Government issued Provisional Measure 984/2020 a few weeks ago willing to take care of the “financial health” of football teams.

During the analysis of this PM by Congress, Federal Congressman Evandro Roman, from Paraná State, sent an additive amendment draft of unprecedent relevance.
 


According to Congressman, subparagraphs a and f of items I and II, of article 30 of Law No. 13,756 / 2018.

The desired changes from the Congressman unlocked the margins of the operators, previsions that were severely and repeatedly criticized by the entire sector.

In the same amendment, the Congressman suggests the exclusion of “payouts” from the tax calculation base, clarifying the taxation over the GGR. Let's see the text:
 

               Law No. 13,756 / 2018
               Art. 30. The proceeds from the collection of the fixed-odds betting lottery shall be destined as follows:

               I - in physical environment:
               a) 80% (Eighty percent) for the payment of prizes and the collection of income tax on the prize;
               (...)
               f) A maximum of 14% (fourteen percent) to cover the cost of maintenance and expenses of the fixed-odds betting lottery’s operator; and

               II - in virtual environment
               a) 89% (eighty-nine percent) for the payment of prizes and the payment of income tax on the prize;
               (...)
               f) A maximum of 8% (eight percent) to cover the cost of maintenance and expenses of the fixed-odds betting lottery’s operator.

Paragraph 1: The percentages allocated to payout and to the costs and costs of maintenance of subparagraphs a and f of items I and II of the caput of this article may vary, provided that the annual average meets the minimum and maximum percentages established in those paragraphs.

Paragraph 1: The amount destined to payouts does not integrate the proceeds from the collection of the fixed odds betting lottery.

 

It needs to be highlighted that Congressman Evandro Roman was responsive to the arguments of the countless operators with whom the congressman had contact in recent months. In addition to the public hearing held at the National Congress in May 2019 and the Abrajogo Online’s Seminar in September, here in Rio de Janeiro, the Congressman kept the doors of his office open to operators, who forwarded him an endless number of suggestions.

The Congressman justify his amendment saying that “the fixed odds lottery will be a factor for recovery and development of the Brazilian sports. With that said, the Law nº 13,756 of December 12th 2018 needs to be revised in a way to grant to the lottery’s operators not to be taxed over amounts that does not represent their real income. This change aligns the base of taxation to the reality and to the best practices of the international “fixed-odds betting” industry.” (this is a free translation from the writer)

Congressman Evandro, thank you very much! It's a great (re)start! We hope the National Congress understands how important are these changes and that the Federal Government accept them.

To my friends of GMB, a big hug and see you next time!

 

Witoldo Hendrich Jr
Founding partner of Online IPS Brazil and Hendrich Advogados