Brazil: Tax incentives related to the Olympic and Paralympic Games
International Tax Review is part of Legal Benchmarking Limited, 4 Bouverie Street, London, EC4Y 8AX
Copyright © Legal Benchmarking Limited and its affiliated companies 2024

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Brazil: Tax incentives related to the Olympic and Paralympic Games

weiss.jpg

jeffrey.jpg

Nélio Weiss


Philippe Jeffrey

On October 10 2012, the Brazilian government published Provisional Measure (PM) 584, providing for tax measures applicable to operations involving the organisation or realisation of events directly related to the 2016 Olympic and Paralympic Games to be held in Rio de Janeiro. The PM provides for the exemption of federal taxes due on import of goods or services used exclusively in activities directly related to the organisation or realisation of both events, such as: trophies, medals, plaques, statuettes, pins and badges, flags and other commemorative objects; promotional material, flyers and the like; and other similar non-durable material (up to one year). Taxes included in this exemption are the II (import tax); IPI (excise duty) over imports due on customs clearance; PIS/COFINS-Import; among other charges and duties.

Non-resident individuals entering Brazil with a temporary visa, employed or contracted by the above organisations to carry out activities related to the events' organisation, are exempt of individual income tax (IRPF).

Furthermore, the International Olympic Committee (IOC) and RIO 2016 (Organising Committee) are exempt from a number of federal taxes, such as the IRPJ (corporate income tax), the IRRF (withholding income tax), the IOF (tax on financial transactions), the IPI (excise tax), the social contribution on net profits (CSLL), the PIS/COFINS-Import and the contribution for the intervention in the economic domain (CIDE). With regards to RIO 2016, the IRRF exemption applies to income paid, credited, delivered, used or remitted by or for this entity, regarding the supply of goods or services.

The PM also provides for the exemption of IPI and PIS/COFINS in the acquisition of goods and services in the local market used in the organisation or realisation of the events.

To enjoy these benefits, the IOC and associated companies, the Court of Arbitration for Sport (CAS), the World Anti-Doping Agency (WADA), National Olympic Committees, International Sporting Federations, media companies and accredited transmitters, sponsors, IOC and RIO 2016 service providers must be established in Brazil if they commercialise products or services in Brazil or employ individuals with or without a formal employment relationship, even if only for organising or realising the games.

The IOC and RIO 2016 shall provide a list to the Brazilian Revenue Service including the individuals and legal entities that shall be entitled to the tax benefits mentioned above. Further regulation is expected in due course.

As a general rule, a PM is issued by the Executive Branch of the Federal Government and has the effect of law while it is analysed by the Brazilian Congress, that can approve (with amendments or not) or reject it. This process should take place within a 60-day period, a term that may be extended for an additional 60-day period. If Congress does not act within this 120-day period, the PM expires and loses effectiveness. If approved without amendments, the abovementioned measures shall apply to taxable events occurring from January 1 2013 to December 31 2017.

Nélio Weiss (nelio.weiss@br.pwc.com) & Philippe Jeffrey (philippe.jeffrey@br.pwc.com)

PwC

Tel: +55 11 3674 2271

Website: www.pwc.com

Return to the BRICS tax cooperation special focus

more across site & bottom lb ros

More from across our site

As German clients attempt to comply with complex cross-border rules, local advisers argue that aggressive tax authorities are making life even harder
Based on surveys covering more than 25,000 in-house lawyers, the series provides insights into what law firms must score highly on when pitching to in-house counsel
The UK tax authority reportedly lost a case due to missing a deadline; in other news, Canada has approved pillar two legislation
There will always be multinationals trying to minimise tax by pushing the boundaries of their cross-border arrangements, Rob Heferen claimed
HMRC’s attempts to crack down on fraudulent tax relief claims are well-meaning, but the agency risks penalising genuinely innovative businesses, writes Katy Long of ForrestBrown
Argentina, Brazil, Mexico and South Africa are among the countries the OECD believes could benefit from the simplified TP rules
It comes despite an offshore enabler penalty existing in the UK throughout the entire period
It is extraordinary that tax advisers in the UK can offer their services without having to join a professional body. This looks like it is coming to an end, Ralph Cunningham writes
Meet the esteemed judges who are assessing the first-ever Social Impact Awards
The ‘big four’ firm has also vowed to spend more on nurturing junior talent; in other news, Blick Rothenberg has hired a pair of tax partners
Gift this article