Taxes on online gambling and betting

The Brazilian online gambling and betting market has changed a lot over the last few years. One of the main changes was the legalization of these activities. Previously, they operated in a “gray area”, where neither companies nor players paid taxes.

It all started with gambling and casino sites realizing that Brazil was a great country to offer their services. As a result, these companies translated their platforms and allowed Brazilians to register.

Many Brazilians started visiting Casino.org for Brazilians to find the best reliable casino and online betting houses to have fun. This is how Brazilian players and bettors started registering in an unregulated market. The government saw all of this and realized that it was necessary to regulate this activity.

It was then that Michel Temer sanctioned law 13.756/18. Later, Luiz Inácio Lula da Silva was responsible for sanctioning law 14.790 on December 29, 2023. This act created specific rules for a market that was, until then, unregulated.

With the recent legal developments in Brazil’s online gambling sector, taxation has become a key topic for both operators and players. Understanding how winnings are taxed is crucial for those engaging in online betting, as it directly affects their overall profits. At the same time, many casinos offer incentives to attract new players, including no deposit bonuses - https://www.elevensports.pt/casinos/bonus-sem-deposito/, which allow users to try games without any upfront investment. These bonuses provide an excellent way for players to experience casino platforms while navigating the evolving tax landscape. As regulations continue to shape Brazil’s gambling market, finding the best promotional offers remains essential for maximizing value and minimizing financial risks.

Definition of taxes

The federal government defined several taxes with the publication of law 14.759 in 2023. One of them was the 18% tax on betting revenue. The amount charged is on the Gross Gaming Revenue (GGR).

GGR is the same as gross revenue. Therefore, this amount does not consider the expenses of online betting houses and casinos when calculating taxes. The amount was slightly higher than the government had previously estimated, which was 16%.

The expectation is that the government's revenue from this tax could bring in revenue of up to R$12 billion annually for Brazil's public accounts. This is the amount taxed only for companies.

Gamblers will also have to pay taxes. In this case, the amount must be presented in the Income Tax (IR) declaration. However, the taxation system for online casino players or sports betting houses is different from that of companies that offer these services.

Brazilians will need to declare income tax winnings

Taxes for betting houses and casino games also appear for Brazilians. Initially, the charge was determined as 15% for amounts above the minimum wage exemption line.

Lula even tried to veto the exemption from the IR charge on winnings from bets and online casino games. However, Congress overturned the President's veto and maintained the exemption for those who win net prizes with a value up to the Income Tax exemption range.

The Federal Senate approved the Income Tax exemption in April 2024. This means that the line that is exempt from paying IR is up to two minimum wages. The amount reached R$2,259.20 per month in 2024.

It was based on this amount that the federal government defined an exemption range for bettors who win up to this amount. With this, any prize of up to R$2,259.20 in 2024 would be exempt from paying the 15% tax.

Example of calculating income tax on winnings from betting and games

The explanation of how income tax works on winnings from betting and games helps you understand how you should calculate the income tax to be paid. Let's consider the fiscal year as an annual period in which the declaration must be sent to the Federal Revenue Service.

Now consider that you bet on sports and played casino games and obtained a profit of R$4,000. However, the total expenditure on bets was R$2,000. Therefore, your net profit was R$2,000.

The amount of R$2,000 is below the income tax exemption range. Therefore, you will not need to declare anything at all on your Income Tax for the tax year in question. Now let's look at another example in which you will need to pay.

Let's say your winnings from betting were R$5,000 and you had a total expenditure of R$1,000 when betting. The net profit, in this case, was R$4,000. Since the amount of R$4,000 exceeds the IR exemption range, you will need to pay Income Tax on your winnings.

The calculation consists of multiplying your net profit (i.e., the R$4,000) by 15%. This will give the result of R$600. Therefore, this will be the amount to be declared and that will be charged on your winnings from betting and online games.

The scenario of taxes on betting and online games in Brazil is unlikely to change over the next few years. Therefore, it is recommended that you familiarize yourself with it so that your experience when playing or betting is the best possible.

With the recent legalization of online gambling in Brazil, taxation policies have become a crucial aspect for both operators and players. The government is implementing regulations to ensure a fair and controlled gambling environment, affecting how winnings are taxed and how platforms operate. Similarly, established casinos like Esc Online provide a well-regulated gaming experience, offering transparency in transactions and compliance with financial regulations. As Brazil navigates these new tax laws, players can benefit from trusted platforms that ensure security and responsible gambling practices, making it easier to enjoy online betting within a structured legal framework.