The Brazilian market for electronic games is experiencing robust growth and diversification, driven by the country’s high number of video game consumers. Given the topic’s significance to the sector, Bill 2.796/2021, which could grant a series of fiscal and economic incentives to the electronic games industry, is currently under consideration in the National Congress.

The primary aim of Bill 2.796/2021 is to regulate the manufacturing, marketing, development, and commercial use of electronic games, thereby fostering the business environment and increasing investments in the sector. For regulatory purposes, slot machines or other gambling games, as well as lottery types, have been excluded from the definition of electronic games.

Originally proposed by the Chamber of Deputies, which approved the base text and forwarded it to the Federal Senate for review, Bill 2.796/2021 underwent debate and amendments in the Senate and was approved on March 13, 2024, with some changes incorporated. Now, the bill will return to the Chamber of Deputies for analysis of the modifications made by the Senate, where it can be approved, adjusted again, or rejected.

It is important to note that, to qualify for regulation under Bill 2.796/2021, individual entrepreneurs, business societies, cooperative societies, simple societies, and individual micro-entrepreneurs must have a gross revenue of up to sixteen million reais in the previous calendar year.

The bill proposes a series of tax incentives for companies or entrepreneurs involved in the electronic games sector, which include:

The bill proposes a series of tax incentives for companies or entrepreneurs involved in the electronic games sector, which include:

1. Income Tax payers can benefit from a 70% tax deduction on overseas remittances from revenues derived from electronic games, provided they invest in the development and production or co-production of independent Brazilian electronic games;
2. The investment and production of electronic games would be classified as “activities of research, development, and technological innovation,” allowing for the deduction of amounts invested in the development of electronic games from the income tax owed by the taxpayer;
3. The development of electronic games will receive incentives under Law 11.196/2005 (Lei do Bem), such as a 50% reduction in the Tax on Industrialized Products (IPI) levied on machines, devices, and instruments intended for the development of games;
4. The development of electronic games will be considered a cultural segment, leading to the possibility of raising funds through Law 8.313/91 (Lei Rouanet), such as access to the National Culture Fund (FNC) through contributions to the company to encourage cultural production; and
5. Electronic game development companies can benefit from the legal regime for startups (Complementary Law 182/2021), which offers advantages involving access to capital and deregulation.

The potential approval of Bill 2.796/2021 would represent a significant advancement in the Brazilian electronic games sector and would offer international investors certain fiscal incentives that could boost investment in the Brazilian market, by establishing a solid legal framework with clear and transparent rules for the sector, reducing uncertainties and risks for investment.