Brazilian Federal Revenue Service defines new rules for taxation of online betting in Brazil.

The Special Secretary of the Federal Revenue of Brazil, Robinson Sakiyama Barreirinhas, signs Normative Instruction RFB No. 2.299, which establishes guidelines for the taxation of Personal Income Tax (IRPF) on winnings from online betting. The publication took place this Thursday (18) in the Official Gazette of the Union , amending Normative Instruction RFB No. 1.500, of 2014, focusing on prizes obtained on betting platforms. The report will focus on the rules for taxing individuals on winnings from fixed-odds lottery bets and fantasy sports, a topic that directly impacts millions of Brazilians who participate in these modalities.

The regulation adds item IX to Article 21 of the previous instruction, including: "net prizes obtained from bets on fixed-odds betting lotteries and fantasy sports as referred to in Article 31 of Law No. 14.790, of December 29, 2023."

How will taxation work?

Taxpayers will need to annually determine the net result of bets placed with all operating agents. The calculation requires adding the winnings and subtracting the losses, separately for three categories: real sporting events, virtual online gaming events, and fantasy sports.

Taxation will apply to the net prize, calculated by summing the positive results of each category. In March, the taxpayer must calculate the tax on the amount exceeding the first bracket of the annual income tax table, at a rate of 15%. Payment must be made by the last business day of April.

According to the previously published regulation (RFB No. 2.191/2024), cash prizes obtained in lotteries, including fixed-odds betting, are exempt up to the limit of the first bracket of the monthly IRPF (Brazilian Individual Income Tax) table, which is R$ 2.259,20. This means that bettors who win up to this amount will not pay income tax.

To assist bettors, the Federal Revenue Service will provide an application on its website for calculating the tax due.

ComprovaBet

The regulatory instruction creates ComprovaBet, an official document that betting operators must provide to bettors electronically by the last business day of February of the year following the receipt of prizes or losses.

The receipt will include the name and CNPJ (Brazilian tax ID) of the operating agent, the name and CPF (Brazilian individual tax ID) of the bettor, as well as the total result in reais (Brazilian currency). The document will detail the sum of winnings and the subtraction of losses for each type of bet.

ComprovaBet will also indicate the bettor's account balance on December 31st of the year prior to the bets and on December 31st of the year of the bets, including all operator trademarks used by the bettor.

The regulation stipulates that the document must contain the following text: "The taxpayer must verify whether the amounts reported on this receipt, added to the amounts reported by other betting operators, imply the calculation and subsequent payment of Personal Income Tax – IRPF."

Taxpayers filing their Annual Income Tax Return must include the balances of accounts held on betting platforms in the Assets and Rights section.

Responsibility of the betting operator

The bettor will be responsible for withholding income tax (IRRF) related to the transactions they have made, based on the Fixed-Odds Lottery Betting Results Receipt – ComprovaBet, provided by the operating agent until the last business day of February of the year following the receipt of prizes or the year in which losses were incurred. It is important to note that losses incurred in other bets or sessions cannot be deducted, as established in the regulations.

Operating agents who fail to provide ComprovaBet will be subject to the penalties stipulated in Article 19 of Law No. 8.383, of December 30, 1991, as established in the sole paragraph of Article 21-B of the new regulations. Furthermore, these operators must submit the Withholding Income Tax Return (DIRF) for individuals and legal entities that received payments subject to withholding tax, even if only for one month of the calendar year.