Income Tax on Online Sports Betting in Brazil: Complete 2024 Guide

The online sports betting market in Brazil has grown exponentially in recent years, with regulation bringing more security and transparency for bettors. Along with this growth, it's essential to understand how income tax (IR) applies to your betting winnings.

Taxation of Online Sports Betting

Online sports betting in Brazil is taxed in two ways:

• Withholding Tax: The betting house withholds income tax on winnings exceeding R$2,112.00 (Brazilian reais). The rate is 15% on the excess amount.
• Annual Tax Return: Regardless of the amount, all winnings from sports betting must be declared on the annual income tax return.

Who Must Declare?

Any individual who has earned winnings from online sports betting in the previous year, regardless of the amount, must declare this income on their tax return.

How to Declare Winnings on Your Tax Return

1. Income Taxed Exclusively at Source: Report the amounts received under "Income Subject to Exclusive/Definitive Taxation" on the "Income Received from Legal Entity" form.
2. Taxable Income: If the total amount of your taxable income exceeds the income tax exemption limit, you will need to declare your betting winnings under "Taxable Income Received from Legal Entity."

Income Tax Exemptions on Sports Betting

• Winnings up to R$2,112.00: These are exempt from taxation.
• Winnings above R$2,112.00: Income tax is withheld at source, at a rate of 15% on the excess amount.

Fines and Penalties

It's crucial to declare your sports betting winnings correctly. Omission or incorrect declaration can result in fines and other penalties from the Federal Revenue Service.

Tips for Correct Declaration

• Keep Records: Save proof of your deposits, bets, and withdrawals to have the necessary data for your declaration.
• Use the Income Statement: Betting houses are required to provide an income statement, making it easier to declare.
• Consult a Professional: If you have any doubts, seek the help of an accountant or tax specialist.

Legislation and Updates

The legislation on sports betting in Brazil is still under development. It's important to stay up-to-date with changes and updates to tax rules.

Law 14.790/23: The Regulation of Sports Betting

Law 14.790/23 established the basis for the regulation of sports betting in Brazil. The law determines the taxation on betting companies and defines the rules for the exploitation of the service.

The Future of Sports Betting and Income Tax

With regulation and the continued growth of the market, income tax on sports betting will play an increasingly important role in federal revenue collection. It's likely that we'll see more changes and refinements to the tax rules in the coming years.