The publication of MP 1182/2023 by the Lula Government on July 25th surprised everyone with the increase in taxation from 16%, initially announced, to 18% upon its publication.

This is because in addition to the 18% on GGR (Gross Gaming Revenue), companies are subject to other taxes depending on the type of taxation to which they are subject, such as CSLL, IRPJ, PIS, COFINS and ISS.

The rate on the GGR plus corporate taxation , whether in the form of Presumed or Real Profit, may reach 30%, not counting other costs with the grant and administration fee. Obviously, this will reduce the effective profit of the operators.

In practice, for the bettor, the income tax rate does not change. The 30% income tax at source remains exclusive for earnings above the exemption limit, currently R$2,112.00. And, since it is exclusive at source, there will be no new taxation in the DAA (Annual Adjustment Declaration – IRPF).

It is worth noting that this MP is already in force, however, it will still undergo changes, as it requires subsequent assessment by the National Congress, to definitively become law, the deadline is up to 120 days so that it does not lose its validity.