For the first time the two leagues discussed an issue together on the eve of the House vote on tax reform
The Brazilian Football League (Libra) and Liga Forte União (LFU) released a joint statement on Tuesday (17) against some parts of the tax reform. The two leagues are against the increase in the tax rate for Football Limited Companies (SAF), from 5% to 8.5%, under the proposal.
According to the two entities, which together represent more than 40 Brazilian football clubs, the new proposal could prevent the increase of foreign interest in the Brasileirão. The rate is currently 5%, which will be reduced to 4% after the company’s sixth year of operation.
Congress could vote on tax reform this Tuesday evening. In recent days, parliamentarians have voted on a series of measures before the break, which will begin next Monday (23rd).
While this is the first time they have publicly announced something together, it is not the first time the two leagues have worked in partnership. Behind the scenes, Libra and LFU are considering presenting a unique proposal for the sale of the Brasileirão broadcast rights next year.
Check out the full Libra and LFU note:
In 2021, Law 14,193/2021 (“SAF Law”) was published after numerous discussions involving several Brazilian football clubs and other relevant civil society actors, at a time when Brazilian football was suffering from the devastating effects caused by COVID -19, and the associative dynamics in force up to then.
By creating the institution of the Sociedade Anônima do Futebol (“SAF”), the Law allowed Clubs to adopt a business model specifically aimed at football which allowed them, on the one hand, to align with recommended business practices already adopted in other segments economic and, on the other hand, undergo tax treatment and debt reorganization which would make the model attractive for new investments capable of financing it.
Therefore, by establishing both prerogatives and obligations for the SAF, Law 14.193/2021 proved to be an important step towards the relaunch, modernization and professionalization of football on the national territory. In less than three years, 95 clubs across Brazil have transformed or started as SAF. Of the clubs that competed in Serie A of the Brazilian championship in 2023, 40% are SAFS.
Among the reasons that explain the explosion of this number is, in particular, the Specific Tax Regime for Football (TEF), which has guaranteed legal security and attracted national and international investments. This is because the SAF law stipulates that 5% of a SAF’s revenue must be collected monthly – and, from the beginning of the sixth year, the rate would be reduced to 4% and the calculation base increased.
Contrary to this successful process, and after a long discussion on the topic, culminating in a text approved by the Federal Senate, the Chamber of Deputies signals that it may reject the maintenance of SAF taxation and impose an increase of around 120% (one hundred and twenty percent).
The approval of this modification, if confirmed, could prevent the creation, as already announced inside and outside the country, of the future largest market on the planet; and, worse still: distance future investments, with enormous sporting, social and economic repercussions; and discourage ongoing projects, including those that have already proven successful.
For this reason, our Club publicly expresses its enormous concern about the imminent revocation of the Specific Tax Regime for Football (TEF) recently created and proposed to the Chamber of Deputies, which could make the rescue of Brazilian football and the affirmation of of the football club.
December 17, 2024.
Follow our content on social media: Bluesky, Threads, Twitter, Instagram and Facebook.
Source: Terra
Rose James is a Gossipify movie and series reviewer known for her in-depth analysis and unique perspective on the latest releases. With a background in film studies, she provides engaging and informative reviews, and keeps readers up to date with industry trends and emerging talents.
