Regulation of Internet betting: what does the Executive’s proposal imply?

The Executive announced in recent days that it is preparing a preliminary bill to regulate Internet games and sports betting. The proposal promoted by the Ministry of Foreign Trade and Tourism (Mincetur) seeks to tax with a 12% direct tax to the net income of this industry.

And it is that the sector in the last years has had an important growth. According to the digital business consultant Attach, in 2021 alone it advanced around 20% and had about 6 million potential bettors. Therefore, the Mincetur with the measure expects to generate an approximate income of S / 4,500 million per year.

In this regard, the tax attorney David Bravo highlights that the fact that the Mincetur draft proposes a “direct tax” of 12% applied to the Net Income (Net Win).

“It should be noted that, at present, the Income Tax is applied on the “net rent” understood as the difference between gross income (revenue less cost of sales) and related expenses with the generation of taxed income”, he points out.

For this reason, the specialist suggests that the legal proposal should detail at what level the tax would be applied.

“If the rule intends to apply to non-resident companies that offer online gaming and betting platforms, the direct tax would be applied to the net incomeIt’s understood as the difference between the amount collected from the bets and the prizes paid to the beneficiaries”, he comments.

Another aspect that stands out is that the requirement to register with the RUC and declare a legal representative would imply that said companies declare and pay the tax directly.

Selective tax on online games

Finally, Bravo highlights that the project includes the application of the Selective Consumption Tax (ISC) with the rate of 1% to the bets paid by the client. Therefore, since the ISC is an indirect tax, it will be transferred to the consumer.

Consequently, from the entry into force of the norm, online betting would have an increase of no less than 1% for this concept, “as well as for the operating costs that require having a legal person in charge in the country, local and the platform dedicated to providing services in Peruvian territory”, indicates the also partner Partner of the Tax Area of ​​the Lazo, De Romaña & Bravo Law Firm.