Peru: Online gambling, sports betting operators to pay Selective Consumption Tax

The Peruvian Ministry of Economy and Finance (MEF) confirmed that online gaming and sports betting operators will have to pay the Selective Consumption Tax (ISC) in addition to the tax on their activities, which according to the current regulation is set at 12% of the net income or net win.

In a press release, the Peruvian ministry stated that online betting will be taxed with the ISC for "generating negative externalities". They added that this "will be determined as part of the delegation of powers granted to the Executive by the Congress of the Republic."

Meanwhile, it was announced that iGaming operators will not be subject to the General Sales Tax (IGV) that, as of October 2024, will be in force for streaming platforms operating in Peru, such as Netflix and Spotify.

In April of this year, the head of the MEF, José Arista, announced that the Executive Branch would present a project to modify Law 31.557, which regulates the online gaming and betting sector, to define new tax and fiscal aspects for operators.

"The Executive Power will submit a regulation to Congress, modifying Law 31.557, to regulate elements that are necessary for the application and collection of the tax on remote games and sports betting, as well as to allow its declaration and payment by the obliged parties,” he said at that time before the Congress plenary.

"What happens is that in-person games do have a tax, therefore, remote games should also have this tax as a matter of equity," he stated.

Regarding the announcement, lawyer Carlos Fonseca Sarmiento, a specialist in gaming legislation in Peru and Latin America, had explained to Yogonet that they would be referring to the ISC, whose rate was not fixed in the transitory provisions of Law 31.557. That tax is advocated by land-based gambling operators.

"So, what they want is to extend a tax of that type also to remote gaming and sports betting. This is going to generate some controversy," he warned.

According to the National Superintendence of Tax Administration, the ISC for the land-based sector "is determined by applying a fixed amount for each casino gaming table and each slot machine in operation."