Brazil’s Receita Federal formalizes annual income tax calculation on betting prizes

The Receita Federal has now formalized what had been working in practice since March: income tax on net prizes from fixed-odds betting and fantasy sports is calculated once a year, by betting category, and the taxpayer does the math. For PSPs and operators, the important part is not the tax rate itself; it is the fact that losses in one betting category cannot be used to offset gains in another.

1. The Coordenação-Geral de Tributação (Cosit) published Solução de Consulta No. 157, dated 24 August 2026, in the Diário Oficial da União on Wednesday (26). Signed by Rodrigo Augusto Verly de Oliveira, the ruling consolidates Receita Federal’s position on the taxation of Imposto de Renda over net prizes earned in fixed-odds betting and fantasy sport.
2. The ruling says net prizes are subject to exclusive and definitive IRPF taxation, meaning they do not enter the annual adjustment base together with other income. The mechanism is similar to fixed-income financial investments: the tax is calculated separately rather than folded into the taxpayer’s broader annual income return.
3. There are three rules that matter operationally. First, the calculation is annual: the taxpayer determines the result of all bets placed in the previous calendar year in a single annual calculation, across all operators used. Second, the calculation is separated by betting nature: real-world sports events, virtual online game events, and fantasy sport are treated as distinct categories. Third, there is no offset between categories: if the taxpayer loses in one category and wins in another, the loss does not reduce the gain in the different category.
4. The tax calculation and payment are the taxpayer’s responsibility. According to Receita Federal’s process, the calculation is made in March via an app made available by the tax authority, and the tax must be paid by the last day of April.
5. This is also a regulatory cleanup after a messy stretch around Article 31 of Law No. 14.790/2023. The original text sent for presidential approval already provided for a 15% rate on net prizes above the first income tax exemption band, with annual calculation by category. But the Ministry of Finance recommended vetoing paragraphs 1 to 3 on the grounds of tax revenue loss and public interest, and the Executive branch accepted the veto in December 2023. After that, Receita Federal regulated the matter in May 2024 through Normative Instruction RFB No. 2.191/2024, amending IN RFB No. 1.500/2014 and introducing a stricter system with calculation per event or session, no deduction of losses from other bets, and withholding assigned to the operator.

For high-risk operators, the point is simple: Brazil has now put a binding administrative interpretation behind an annual, category-by-category tax model. That affects product design, reporting logic, player statements, and the operational burden around reconciliation — especially for businesses running multiple betting verticals under the same customer base.