Zona de Azar Brazil – São Paulo: An Attractive Option for Fixed Odds Betting Companies

Brazil.- 19th March 2024 www.zonadeazar.com In a opinion published yesterday, the São Paulo City Hall determined that the proceeds from physical or virtual fixed odds lottery intended for prize payment or social security are not subject to taxation by ISSQN (Tax on Services of Any Nature).

MAIA YOSHIYASU ADVOGADOS has prepared an informative article on the arguments and repercussions of this opinion. We share it below:

Law 14,790/23, approved in December of last year, established that operators of Fixed Odds Lotteries will receive 88% (eighty-eight percent) of the GGR (gross gaming revenue, i.e., bets minus prizes) to cover their operating and maintenance expenses.

This has generated uncertainty in the sector regarding the taxable base for ISS, PIS, and COFINS, since the definition of what would be the service price was still absent. Our partners Luiz Felipe Maia and Marcelo Vicentini, together with the National Association of Gaming and Lotteries – ANJL, met with the São Paulo City Hall to expose the need for an interpretative norm that would provide security to companies wishing to establish themselves in the city of São Paulo.

After a fruitful debate with municipal authorities, the legal grounds brought by sector representatives were accepted by the Municipal Secretary of Finance, resulting in the publication of a normative opinion last Friday which clarifies that:

Article 1: The amounts referred to in items III and V of the “caput” of article 30 of Law No. 13,756, of December 12, 2018, with the wording given by Law No. 14,790, of December 29, 2023, as well as the percentage of 12% of the proceeds from the collection of fixed odds betting lotteries in physical or virtual form, with destination established by § 1-A of the same legal provision, are considered non-taxable transfers by the Tax on Services of Any Nature (ISSQN).

With this, the city of São Paulo presents itself as a highly attractive option to host fixed odds betting companies, offering the lowest ISS rate in the country (2%), combined with the correct definition of the calculation base (88% of the GGR).

Source: MAIA YOSHIYASU ADVOGADOS

Edited by: @MaiaDigital www.zonadeazar.com