Legislation

Sin tax decree approved on online gambling in Peru  

The Minister of Economy and Finance, José Arista, announced that the government has approved  a legislative decree to optimize the collection of taxes on online gambling and sports betting, created under Law No. 31557. “Today, we have complemented a tax established by Law No. 31557, which regulates the operation of online gambling and sports betting,” he said.

“This law was published a few years ago, but unfortunately, the regulations were complicated. Therefore, we mentioned in Congress that this would be one of the powers we should be delegated. They have granted us the authority to legislate on this tax, and we have now approved this regulation in the Council of Ministers, which will enable us to impose a tax on platforms utilizing online gambling and sports betting, establishing a Selective Consumption Tax (ISC) to facilitate collection,” he added.

Through Legislative Decree 1644 (published on September 13, 2024), remote games and remote sports betting have also been incorporated into the scope of application of the Selective Consumption Tax (ISC).

It has now been specified more clearly that the ISC tax is aimed at players. Players engaged in online sports betting and gambling will be responsible for paying taxes on these services. According to the modification, the charge for both online sports betting and casino games will be 1%.

The technological platform operated by a legal entity established abroad will act as the ISC collection agent. The amount to be collected will result from applying the ISC rate to the value of each bet. The collection will take place at the moment the bet is placed.

The Ministry of Foreign Trade and Tourism (Mincetur) approved the regulations of Law No. 31557 which regulates online gaming and sports betting in October 2023. All companies whether national or foreign, must adapt to the new regulation and comply with the correct payment of the special gaming tax, which stands at 12% of the net profit. However, despite having the framework, its implementation has been challenging.

Last month the government announced that online casino gambling and sports betting would also be subject to the Selective Consumption Tax (ISC) which would be determined as part of the delegation of powers granted to the Executive by the Congress of the Republic.