Senator from Rio approves amendment that changes taxation of Brazilian horse racing.
An amendment by Senator Francisco Dornelles from Rio de Janeiro to Provisional Measure No. 540 , of August 2, 2011, converted into Law No. 12.546 , of December 14, 2011, which establishes the Special Regime for the Reintegration of Tax Values for Exporting Companies (Reintegra), benefited Brazilian Jockey Clubs.
After being approved by the National Congress and sanctioned by President Dilma Rousseff, the proposal alters the rate for calculating the National Horse Breeding Coordinating Commission – CCCCN. Now, the 1,5% rate that jockey clubs pay to the Ministry of Agriculture will be applied to the net betting volume, and no longer to the gross volume. This represents a significant reduction in the tax burden for Brazilian Jockey Clubs.
The measure corrects a distortion that was extremely detrimental to the clubs, which had been collecting contributions based on total revenue, despite allocating approximately 90% of their income to payments to bettors, owners, breeders, and professionals. The issue remained within the horse racing community and was considered an important victory; for the Jockey Club Brasileiro alone, the change in the calculation basis for the contribution paid to MAPA (Ministry of Agriculture, Livestock and Supply) will mean savings exceeding R$ 3 million per year.
The suggestion for the change was brought to Senator Dornelles by President Luis Eduardo da Costa Carvalho, who was in Brasília several times to follow the progress of the bill. Approved in the Senate and then in the Chamber of Deputies, the proposal became law, published in the Official Gazette on December 15, 2011.
To commemorate this important change achieved for the benefit of horse racing, the JCB, through its president, Luis Eduardo da Costa Carvalho, decided to call for an Extraordinary Senator Francisco Dornelles Race, over 1.400m on turf, for three-year-old horses, on Sunday, February 12th, the date of the first race of the Triple Crown for products, the GP Estado do Rio de Janeiro (G1).
Initially, the proposal to change the rate for calculating the CCCCN was included in Senate Bill 119/2010, authored by Senator Francisco Dornelles. After being approved by the Senate, it was converted into Bill 7748/2010, which was approved in July by the Committee on Agriculture, Livestock, Supply and Rural Development (CAPADR) of the Chamber of Deputies and was currently in the Committee on Finance and Taxation (CFT) awaiting a report from the rapporteur, Deputy Pepe Vargas (PT-RS). Since the proposal has already become law, the bill will now be archived.
Law No. 12.546, of December 14, 2011
Establishes the Special Regime for the Reintegration of Tax Values for Exporting Companies (Reintegra); provides for the reduction of the Tax on Industrialized Products (IPI) for the automotive industry; and alters the incidence of social security contributions owed by the companies it mentions. amends Laws No. 11.774 of September 17, 2008, No. 11.033 of December 21, 2004, No. 11.196 of November 21, 2005, No. 10.865 of April 30, 2004, No. 11.508 of July 20, 2007, No. 7.291 of December 19, 1984, No. 11.491 of June 20, 2007, No. 9.782 of January 26, 1999, and No. 9.294 of July 15, 1996, and Provisional Measure No. 2.199-14 of August 24, 2001; repeals article... Article 1 of Law No. 11.529, of October 22, 2007, and Article 6 of Decree-Law No. 1.593, of December 21, 1977, under the terms specified; and provides other measures.
Article 23. Article 11 of Law No. 7.291 , of December 19, 1984, shall now read as follows:
"Art. 11. ……………………………………………………………………………………………..
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§ 4 For the purposes of calculating the contribution referred to in the heading of this article, the following shall be deducted from the total value of the general betting activity of the previous month:
I - the amounts paid to bettors; and
II – the amounts paid as prizes to owners, horse breeders and turf professionals." (NR)
