The sports betting market in Brazil is booming, and tax regulations have kept pace with this evolution. On March 18, 2024, the municipality of São Paulo has taken an important step by publishing the Normative Opinion SF no. 1/2024, which establishes the basis for calculating Service Tax (ISS) for this sector. The measure aims to attract specialized companies and create a safer and more transparent business environment.
Details of the ISS calculation basis
According to the new opinion, the basis for calculating ISS in São Paulo for fixed-odds lotteries is part of the total amount collected (turnover), from which the prizes actually paid out to the bettors are subtracted, resulting in the GGR (Gross Gaming Revenue).
Next, the percentage of 12% earmarked under Law No. 13,756/2018 is deducted, arriving at NGR (Net Gaming Revenue)which will effectively serve as the basis for calculating the tax.
Therefore, the only deductions taken into account are:
- The prizes paid out to the winners.
- The percentage of 12% of the proceeds of the fixed-odds lottery (according to the provisions of § 1-A of art. 30 of Law no. 13.756/2018).
This calculation structure was created to attract sports betting companies to the municipality of São Paulo by offering clear rules and defining a stable tax burden.
Legal certainty is essential in this market, as it simplifies the understanding of tax obligations and reduces risks for those wishing to operate in São Paulo. It can be seen that income tax levied on the premium is no longer part of the deductions applicable to the calculation of ISS.
Read also: Online sports betting: new rules and fines
Conclusion
The publication of the Opinion SF Regulation no. 1/2024 The decision by the São Paulo Municipal Finance Department marks an important step forward in regulating the sports betting market in Brazil. By defining a calculation basis for the ISS levied on these services, the municipality is providing a safer and more attractive environment for companies in the sector. Companies such as CLM Controller play a crucial role in this scenario, offering the necessary support for these companies to operate in compliance with legislation and to take advantage of growth opportunities in the market.