The Brazilian Internal Revenue Service (Receita Federal do Brasil) issued the RFB Normative Instruction 2.191, dated May 6, 2024, providing clarifications and adjustments regarding the taxation of prizes arising from fixed-odd bets in Brazil.
Find below 5 key points about the new regulation:
1. The prizes obtained in lotteries and fixed odd bets up to the value of BRL 2.259,20 are exempt from income tax. Net prizes above this amount will be taxed and subject to Brazilian withholding tax at the rate of 15% at the time of payment or credit of the prize;
2. The definition of “net prizes” is the difference between (i) the prize amount and (ii) the amount that was bet, calculated for each bet, after the conclusion of a actual sporting event or for each session of a virtual online gaming event;
3. Offsetting of losses incurred in other bets or sessions for the calculation of net prizes is not allowed;
4. The responsibility for the calculation and collection of Income Tax by individuals (IRPF) related to fixed odd bet transactions, subject to Brazilian withholding tax at the rate of 15%, lies with the betting operators;
5. These changes in taxation will affect fixed odd bets regulated by Federal Law 14.790/2023, operated by legal entities headquartered in Brazil and authorized by the Ministry of Finance.
