The Brazilian Supreme Court has decided to investigate the city of Rio de Janeiro’s collection of Municipal Service Tax (ISS) in relation to horse racing bets. The case includes the racetrack operator Gávea, the Brasileiro Jockey Club (JCB), and the Municipality.
The aim is to determine whether the ISS can be applied to bets and whether the tax should be based on collecting them or selling the racecourse entry tickets. On 1 June, the Brazilian Association of Departments for Capital Finance (ABRASF) filed a document with the Supreme Court to contribute to the case.
The organisation has ensured in the paper, shared by BNL Data, that fixed odds bets will be controlled beginning in the second half of 2020. It also stipulates that the taxation must be determined “on the value of the bet which is the consideration for the provision of the service of races and competitions, provided in point 12.10 of the services list of LC 116/2003.”
The document claims that bets are “superfluous expenses” and that “it shows a high capacity from the service provider since it is supposed to have all the necessary services for its economic life.” Consequently, the association considers it wrong to eliminate the betting tax in favour of calculating it on ticket sales.
Ricardo Almeida Ribeiro da Silva, ABRASF’s legal advisor concluded: “The financial impact that the decision of the Supreme Court will have on this tax (which generates around $1.5bn in the Brazilian online market, and it’s on its way to be regulated) will be key to finance public policies of local entities throughout the country, not only for their general income, but also for the extra-fiscal role that the ISS can play.”