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Brazil’s federal tax authority is expecting newly licensed online betting operators to voluntarily resolve past tax liabilities based on their activities in the formerly unregulated market, according to the agency’s chief official.
Testifying before a special Senate commission on Tuesday (March 11), the secretary of Brazil’s Federal Revenue Service said tax officials will speak to each of the country’s 80 authorised operators regarding their activities in the country prior to the launch of a new licensing regime at the start of this year.
Robinson Sakiyama Barreirinhas noted that a voluntary compliance programme was a key tenet of the January 6 ordinance that created a tax working group comprising officials from his own agency and from Brazil’s federal gambling regulator, which both sit under the Ministry of Finance.
Since the launch of Brazil’s licensing system on January 1, tax officials now have access to information on the revenue of online betting operators that will give some indication as to which companies were active in the unregulated market and how much money they were making, Berreirinhas said.
“I’m going to call them and say, ‘Look, you didn’t just appear out of nowhere; you were here already. Now I know how much you’ve been making since January, let’s talk about the past, about the past five years. Let’s talk about self-regulation,” the federal tax chief told members of the Senate’s special investigatory committee (CPI) evaluating the online gambling industry.
Berreinhas said he believed that licensed operators would be keen to reach an agreement with tax authorities, “because if they don’t do this, they will no longer be treated as partners of the Federal Revenue Service in this regulatory initiative and they will be treated as another group”.
Material Presence
The tax chief told senators that Brazil’s effective betting tax of 12 percent of gross revenue may not be applicable to the past activities of operators as it was established under a December 2023 federal law and cannot be applied retroactively.
Still, any companies that had a “material presence” in Brazil would have been expected to pay corporate income tax based on their profits, while their revenues would also have been subject to Brazil’s PIS/Cofins sales taxes.
“If they were ‘materially’ in Brazil, what is materially? They didn’t establish a company, they said that the company was based somewhere else, but in reality they were here, doing business here, their principals live in Brazil, bringing money here, then they have to pay tax in Brazil,” Berreinhas said.
The tax official did acknowledge that it was not always easy to prove whether a company had a tax presence in Brazil, and he insisted that his agency would need to proceed with caution because of the possibility of its actions being challenged in court.
He also stressed the importance of not treating those operators that have chosen to become licensed in Brazil at a disadvantage compared with those that have remained offshore.
“It could be that we come back to Congress and say, ‘Okay, we’ve analysed this and these companies are acting in good faith, they acknowledge that they were here in Brazil and I want to offer, perhaps, instalment payments over x months, with some kind of discount,” Berreinhas said.
“We have to give this vote of confidence to these companies and treat them differently to those who [did not obtain a licence] and who continue to operate in the unregulated market.”
Winnings Taxes
The head of Brazil’s federal tax authority was testifying at the first meeting in 2025 of the Senate’s special commission on online betting (CPI).
The CPI was established in November with a mandate to investigate Brazil’s then regulating market, specifically in the wake of a series of negative reports on the industry and political concerns of problem gambling and overspending by poorer Brazilians.
The CPI’s stated areas of focus include marketing practices, responsible gambling and risks of money laundering, but taxation and past tax liabilities of operators had already come under scrutiny during a series of initial public hearings conducted prior to Christmas.
Addressing another tax matter, the head of Brazil’s Federal Revenue Service lamented that Congress elected last year to reject President Lula da Silva’s preferred structure for a tax on players’ winnings from online betting.
As approved by Congress, Brazil’s legislation requires players to pay a 15 percent tax on their annual net winnings above a threshold amount of around US$400.
Barreinhas said he had strongly supported President Lula’s partial veto and his agency’s subsequent guidance to instead apply the 15 percent tax to the value of every winning bet.
The Senate special commission could consider a recommendation to change the winnings tax structure as part of its eventual report, Barreinhas told senators.
The chief federal tax official also noted that Brazil’s Congress will soon have to determine how a newly created selective consumption tax will be applied to gambling and betting.
He said that the purpose of taxes on gambling was not to raise revenue for the government but instead to act as a “deterrent”.
“When we talk about gaming, tax … cannot be neutral; it has to be as harsh as possible in order to disincentivise an activity that we know causes harm,” Barreinhas added.
As things stand, the Senate CPI on online betting is set to report its findings and non-binding policy recommendations before the end of April.
Following Berreinhas’ appearance on Tuesday, members of the CPI approved a series of resolutions to call additional witnesses to testify before the committee. However, a series of further resolutions seeking to obtain confidential financial information on Brazil’s licensed operators were not voted on.
