The collegiate signed the following thesis: "The incidence of ISS on the distribution and sale of tickets and other lottery products, bingo cards, or betting coupons, sweepstakes and prizes is constitutional (item 19 of the List of Services Attached to the Law Complementary 116/2003)."
Ministers also agreed that in these situations, the ISS calculation base must be the amount to be remunerated for the provision of the service, "regardless of the ticket charge, the Tax on Services of Any Nature (ISS) is not constitutional on the value of betting activities. The understanding was signed by the Federal Supreme Court in a virtual trial that ended this Friday (5/29)."
The minister analyzed two constitutional issues. The first consisted of knowing if the incidence of ISS on exploitation of betting activity is constitutional. The second, on the other hand, tried to define whether, since the game 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 him, the services of distribution and sale of tickets can be framed in the concept of human activity turned to the economy. Therefore, said the minister, there is "human effort rendered in favor of a third party."
Regarding the calculation base, Gilmar Mendes pointed out a dubious question. At the same time that municipalities are empowered to tax services, it is up to the Union to tax income. For the minister, a part of the value of the bet represents income, so it is not up to the municipality to tax it.
"The municipality cannot tax income as if services were under penalty of violation of the distribution of tax powers established in the Federal Constitution", he understood.
Gilmar Mendes also stated that complementary legislation in the matter is of much importance, given that the Constitution "does not provide all solutions, much less in tax matters."
It's not service
The only one to differ, Minister Marco Aurélio stated that the sale of bets cannot be considered a service. For him, it is not possible to define the collection of the tax calculated on the sale using as a basis of calculation a tax that already exists, in this case, the Income Tax. This, according to the minister, would challenge the Union's competence over residual taxes.
The vice-dean suggested the following thesis: "The incidence of Tax on Services of Any Nature - ISS - calculated on sales of bets is incompatible with the Federal Constitution."
Minister Dias Toffoli did not participate in the trial.
Case history
In this case, the tax was levied by the City of Rio de Janeiro on the amount of bets received by the Jockey Club Brasileiro in horse racing.
The appeal was filed against a decision by the Rio de Janeiro Court of Justice, which was based on STJ jurisprudence on the same case to conclude that “the exploitation of gambling is a service and is taxable under the terms of the municipal law, whether when the sale of betting takes place by the tourist entity itself, whether when made by third parties.”
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 pules (bet ticket) does not have to be considered service provision. Thus, the municipal tax could only apply to the ticket 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 in the normative price forecast, which, in the end, implies the collection of part of the amount for the benefit of the applicant,” said 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 visitors, but not on betting income. 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 users obviously do not attend and pay admission to a physical location.
Source: Revista Consultor Jurídico
