Court Nullifies Nearly R$300 Million Tax Claim Against Corinthians, but Ruling Is Not Final

A São Paulo state court has annulled a R$298.3 million tax claim filed by the city against Corinthians, according to Revista Oeste. The 1st Court of Public Finance ruled that revenues from sponsorships, broadcasting rights, and static advertising between 2015 and 2018 do not qualify as service provision and thus are not subject to the ISS (Services Tax).

The case, filed by Corinthians, challenged the legal basis of the tax demand. The court sided with the club’s legal team, deeming the municipal charge unconstitutional. However, the decision is not final. The case will undergo mandatory review by the 18th Chamber of Public Law of the São Paulo Court of Justice, which may uphold or overturn the ruling.

If upheld, the ruling would provide major relief for Corinthians, currently Brazil’s most indebted football club. A Sports Value report from May estimated the club’s total debt at over R$2 billion, including obligations tied to the Neo Química Arena. Even without the stadium debt, the figure stands at R$1.2 billion.

The current board, led by Augusto Melo, attributes the debt to two main factors: around R$400 million incurred during the current administration and another R$300 million in interest accumulated from prior commitments.