Senate Committee approves legal framework for games

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Text, which is sent to the plenary for analysis, provides for tax incentives and regularization of the sector. Proposal also creates protection mechanisms for children and adolescents. The Senate Education Committee approved this Tuesday (27) a proposal that regulates the electronic games industry in Brazil, the “legal framework for games”. The text, which will be voted on in the plenary, creates tax incentives, regularizes professions, recognizes the electronic games market as an economic activity and includes the sector in programs to promote culture. The proposal approved by the collegiate introduces a series of changes to the project that had already received approval from the Chamber of Deputies in October 2022. The new version, built by senator Leila Barros (PDT-DF), responds to requests from the sector and the Ministry of Farm. One of the central changes is the removal of fantasy games — or “fantasy games” — from regulation. This type of game, in which a user assembles a fictional team with players from a real competition and earns points based on the athletes’ performance, has already been the target of the project that regulated the online sports betting market. The text approved by the commission includes the possibility of the development of electronic games receiving incentives via the Audiovisual Law and the Rouanet Law. It also establishes that slot machines, games of chance and lottery types will not be considered games. Young people create companies on the outskirts and enter the billion-dollar gaming market. Furthermore, it allows the deduction of up to 80% of investments made in the development of electronic games in the calculation base of Income Tax and Social Contribution on Net Profit (CSLL), provided for in the Good Law.”[O texto] seeks to encourage and support the development of electronic games as an important activity for both technological innovation and the cultural sector, by aligning game development activities with existing laws that offer support and incentives to research, development, innovation and cultural sectors . This is an expansion and improvement to the measures provided for in the PL [projeto de lei] original”, argued Leila. Incentives The opinion presented by Senator Leila characterizes the development of electronic games as technological research and development of technological innovation. The definition paves the way for a series of incentives provided for in the Lei do Bem, which creates tax incentives for companies that carry out research, development and innovation. Under the Lei do Bem, game development companies will be able to deduct up to 80% of investments made in the development of electronic games on the Income Tax and CSLL calculation basis, observing criteria from the Ministry of Science and Technology. They may also be entitled to other benefits provided for in this legislation, such as a 50% reduction in the Tax on Industrialized Products (IPI) on machines and equipment used in development, accelerated depreciation of equipment and inputs, among others. The text allows companies to raise funds for the development of games through the Rouanet Law and the Audiovisual Law, created to encourage culture in the country. Leila Barros’ opinion meets a demand from the sector and lists essential tools for the development of games in the country, which should be facilitated by the government. This group includes, for example, development kits — called “DevKits”. The proposal also establishes that: foreign companies can deduct 70% of the tax on remittances abroad related to the exploration of electronic games or licensing on Brazilian soil with the investment in national independent electronic games that game development companies can benefit from the rules of the legal framework for startups and that games can be protected through patents Game development as a profession The opinion also establishes the recognition of electronic game development companies as a of the country’s economic activities and obliges the Brazilian Institute of Geography and Statistics (IBGE) to create a sector code in the National Registry of Economic Activities (Cnae). The text recognizes the following professions in the area: visual artist, audio artist, narratives, game designer, programmer, tester and producer. The measure allows these professionals to be classified as individual microentrepreneurs (MEI) and small businesses. It also establishes that the government must support the training of professionals for the industry. This could occur, for example, through incentives for technical and higher education courses. Companies in the gaming segment register growth in the DF Protection of children and adolescents In addition to encouraging national production, the project foresees that electronic games can be used in education and therapy. It will be up to the government to regulate the way in which they can be adopted in these spaces. The proposal establishes that the government will be able to create a repository of games for use by public teaching, research and health institutions. The rapporteur’s opinion also provides that companies that develop electronic games must create mechanisms to protect violations of the rights of children and adolescents. According to the text, game suppliers must ensure that the environment does not lead to violence, exploitation and discrimination against minors. In games where there is interaction between players, companies must create reporting systems. Furthermore, on platforms that have in-game purchases, companies must adopt mechanisms that guarantee the consent of parents and guardians for transactions.

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