Peru has finally enacted a law that regulates sports betting and online gambling in the country, as the Government has given the green light to the bill that introduces a 12% tax on net income and that would contribute $40m annually to the public coffers.
Peruvian President Pedro Castillo stressed that “for the first time, a special tax is being created” on online gambling and sports betting activity, something that will allow the South American country to “generate an annual collection of approximately $40m for the State.”
In a ceremony held at the Government Palace, Castillo signed Bill 31,557 into law and assured that it will allow Peru “to have more resources to meet its economic and social obligations.”
The contributions will be shared equally between the Ministry of Health, the Ministry of Foreign Trade and Tourism, and the Peruvian Sports Institute, while 20% will also go to the public treasury.
According to Castillo, this “represents an important step towards formalizing activities that until today had operated without any type of regulation or supervision.”
Additionally, he highlighted the joint work of the Executive and Legislative branches to promote “growth and development to benefit all citizens.”
“The Executive and Congress have agreed on the need to establish a regulatory framework so that these operations are controlled in an integral way, paying taxes and complying with the appropriate conditions.”
Implementation of the Peru online gambling law
Eduardo Sevilla, Director of Casino Games and Slot Machines at the Ministry of Foreign Trade and Tourism (Mincetur), explained that 60 days after the publication of the regulation, the rule comes into force and the companies “will receive the authorization and [will be able to] register.”
Furthermore, tax specialists stressed that Peru should prioritize opening the market since a large number of bets are expected towards the end of the year, as the FIFA World Cup will begin at the end of November in Qatar.
In conversation with La República, the director of the Master’s degree in taxation at the Universidad Peruana de Ciencias Aplicadas (UPC), Francisco Pantanoso Velloso da Silveira, said: “As it is an annual tax, its effects are immediate. Apparently, we’re still waiting for the regulation [to come into force], but the ministry in charge has 120 days to present it. I understand that they’re rushing because there will be a large number of bets at the end of the year.”
It should be noted that the law establishes that operators need to be registered in the Single Taxpayer Registry (RUC), have a legal representative in the country, and use the “.pe” web domain on their platform.
If these requirements are not met, companies will not be able to sign sponsorship or advertising agreements. In addition, a Selective Consumption Tax (ISC) will be included, which would add a 1% tax for players.
The Peruvian Sports Betting Association (Apadela) has voiced its support for the regulation, although it issued a statement against Congress’ approval in July.
“The law brings unfair competition to the table because it imposes a tax that doesn’t consider companies operating from abroad without a branch in Peru.”
As representatives from the association explained: “Congress exempts the payment of this tax to around 100 offshore companies that are not physically in Peru, but that operate in the country through their digital platforms.
“In addition, there’s no actual obligation on the recently approved regulation to establish a branch to operate in the country.”