Gambling Operators in Brazil Told How to Report and Audit Income
Auditing and income reporting methods confirmed by SPA in a new report
SPA Outlines Income Reporting and Taxes from doloresbarrioslua at Pixabay. © doloresbarrioslua, Pixabay
Key Facts:
- Brazil’s SPA has released a guide on how to audit and report income
- The guide reminds operators that taxes contribute to various social projects and causes
- There’s a possibility of selective taxes to come, in addition to the current ones
It’s been a little over a month since online betting became legal in Brazil. The industry has come a long way since the country approved its first gambling licences and there’s recently been a significant update regarding auditing and income reporting.
The Secretariat of Prizes and Betting (SPA) has published a ‘technical notice’ on auditing and reporting income licensed operators generate through their gambling websites. It’s called Technical Notice 299 and includes instructions on calculating gross gambling revenue (GGR).
Gross Gaming Revenue
An operator licensed by Brazil Bets should calculate GGR in the following way: Total income from bets – (Prize money paid out to winners + income tax on prize money). The technical notice reminds operators that they should continue calculating their GGR in the proper way.
This is because it’s a legal requirement that tax money received from operators goes towards various projects, efforts and causes that have social and community benefits. This is in accordance with Law No. 14,790/2023, which controls Brazil’s new legal betting framework.
All licensed operators in Brazil must pay tax on GGR at a rate of 12% from 1 January 2025. There are three additional taxes that look at an operator’s GGR and are applied to it accordingly. These are as follows:
- Social Assistance Contribution (COFINS): A monthly federal tax whose rate is 7.6%
- Contribution to the Social Integration Program (PIS): Another monthly federal tax with a lower rate of 1.65%
- Municipal Service Tax (ISS): A monthly tax whose rate varies from 2% to 5%, depending on the operator’s municipality
On top of these, there’s a monthly oversight fee that operators must pay to the SPA. This ranges from BRL 54,419.56 to BRL 1,944,000.00, with the final fee calculated from the operator’s monthly GGR.
How Brazil Bets Allocates Its Tax Revenue
A key reason for making online betting legal in Brazil was so that money could be generated through taxation for a variety of good causes. This is partly to offset any negative effects of betting. Brazil Bets currently distributes its tax revenue to the following:
Civil Society
- 0.10% to the Brazilian Red Cross, which offers assistance in emergencies and humanitarian aid
- 0.20% to Fenapestalozzi, an organization that offers disabled people a range of services related to health, education and social matters
- 0.20% to Fenapaes, another organization that helps disabled people
Federal Sports
- 0.30% to the Brazilian Paralympic Club Committee, which helps clubs that practise Paralympic sports
- 0.50% to the Brazilian University Sports Confederation, which supports sports at universities
- 0.50% to the Brazilian School Sports Federation, which offers assistance for sports at the schools level
- 0.70% to the Brazilian Club Committee, which promotes club-level sports
- 1.30% to the Brazilian Paralympic Committee, which supports athletes training to compete in the Paralympics
- 2.20% to the Brazilian Olympic Committee, which supports the country’s Olympic athletes
- 7.30% to various projects within the National Sports System and certain athletes
The Future of Taxation
While things have been established for now, there’s a chance that changes in reporting processes could come in the future. The SPA is constantly monitoring the industry and is keen to introduce changes if they make things more accurate. As of now, operators have to file audited accounts monthly.
At some point this year, the discussion of selective taxes for gambling operators will be brought to the Senate. There’s also the idea of ‘sin taxes’ being applied because of the negative effects gambling may have. Whether these will come to pass remains to be seen.
