World Cup Brazil 2014

A note published in Brazilian portal Terra informs that FIFA and the Brazilian Government are having a dispute about tax exemptions.

One of the requirements of FIFA to choose a country to host the World Cup is that the Association be exempt of all taxes; according to the Ministry of Sports, this condition was accepted by the Brazilian Government.

However, now  Receita Federal (the powerful Brazilian Tax Service) affirms that the exemption would not be extented to FIFA’s contractors. The note says that Receita is studying limits to the tax rebates that the contractors will be allowed to claim; FIFA, however, wants the contractors to be fully exempted.

This brings to mind an infamous incident between Receita and the Brazilian Federation which happened in 1994, right after the Brazilian team returned from the winning campaign in the United States.

The Brazilian team was led by Ricardo Teixeira, President of CBF. Teixeira used the “clamor of Brazilian people to meet the heroes of the World Cup” as an excuse to not pass through customs; the customs staff felt the pressure and let them pass. The episode became known as “voo da muamba” (smuggle flight).

Later on, it was verified that many of the heroes illegaly imported stuf without paying taxes; Teixeira himself brought an equipment to produce beer, probably the most expensive product in the lot.

Teixeira and the Government have been fighting in courts since. Brazilian public opinion sided eventually with the Government, rather than with “the heroes”. Receita Federal seems to have very few reasons to be complacent with FIFA.

Update, April 24th 2010: the Minister of Sports informed that a law draft will be sent to Congress this month. Every tax exemption must be approved by the Congress. If the law is approved before December 31st 2010, FIFA and all contractors related to the World Cup 2014 will be tax exempted starting on January 1st 2011.

Update, May 26th 2010: the law was approved, as per FIFA requests.

This entry was posted on Wednesday, September 30th, 2009 at 8:47 am and is filed under business, fifa, legislation.