Brazil's Federal Tax Service to Discuss Sports Betting Taxation at CPI Hearing

The hearing, scheduled for September 4, is being initiated by Senator Carlos Portinho, who is seeking to clarify how taxes will flow from abroad to Brazil. The commission was created in April this year to combat match-fixing and illegal activities in sports betting.

Under Regulatory Decree No. 827, operators must have their headquarters in Brazil. Foreign companies can also obtain a license, but they must have a subsidiary in Brazil, where at least 20% of the capital is owned by a citizen of the country. To register as a taxpayer in Brazil, companies must provide a joint certificate from the Federal Tax Service and the Attorney General's Office of the National Treasury.

Portinho expressed concerns about the legality of the platforms that are active in the Brazilian market, sponsoring clubs and advertising in the media, while transferring billions of reais abroad without paying taxes.

The day before, on September 3, CPI will hear representatives of the Ministry of Finance and the Brazilian Sports Betting Association (Abaesp). Finance Ministry representative Regis Dudena, head of the Prizes and Betting Secretariat (SPA), will present plans to ensure that operators comply with tax requirements. Abaesp President Rodrigo Alves will talk about the measures taken by sports companies to prevent match-fixing.

CPI will also consider subpoenaing representatives of the Brazilian Court of Arbitration for Sport (STJD) and other key figures. Among them are STJD President Luiz Otávio Veríssimo Teixeira and STJD Attorney General Paulo Emílio Dantaj Nazaré. They will be invited to discuss manipulation in sports betting. Former football referee Alfredo Lebeling and representatives of the Brazilian Institute for Responsible Gaming (IBJR) may also be called to discuss the problems with the Video Assistant Referee (VAR) system and its impact on betting.

Another important request that the CPI will be considering is to obtain certificates of all match-fixing cases heard in sports courts, identifying the clubs and athletes involved. There is a concern that the lack of centralized information could allow suspects to avoid punishment by moving between different jurisdictions.

The commission was created after Botafogo owner John Texor was accused of manipulating São Paulo players and one of the referees in a match against Palmeiras. The allegations sparked a storm of debate, with CPI president Jorge Cajuro saying that if Texor’s allegations were proven false, he should be expelled from the country.

According to Rafael Marchetti Marcondes, chief legal officer of Rei do Pitaco and IBJR, the CPI’s work is just the beginning of the fight against match-fixing, and other bodies such as the federal police, the prosecutor’s office, federations and clubs must be involved.

“We must consider the CPI’s work as an initial stage that must include collaboration with other bodies such as the federal police, the prosecutor’s office, federations, clubs and society in general, as well as the sports betting regulator,” Marcondes said.