Palmeiras faces a renewed legal obligation to pay more than R$ 6 million in unpaid social security and employee guarantee fund contributions following a federal appeals court ruling. The Tribunal Regional Federal da 3ª Região overturned a previous lower court decision that had favored the club in a long-standing dispute over payments made to 89 professionals between 2006 and 2009.
App Appeals Court Overturns Previous Ruling on Image Rights
The legal dispute centers on payments categorized by Palmeiras as image rights for 89 players, coaches, and staff members who worked at the club during a three-year span ending in 2009. Federal appeals judge Herbert Cornelio Pieter de Bruyn Junior accepted an appeal from the National Treasury, ruling that the funds held a clear salary nature rather than purely civil commercial agreements, as reported by ESPN and confirmed by UOL.
According to Placar, the Ministry of Labor initially audited the club in 2016 for failing to collect the Fundo de Garantia do Tempo de Serviço, commonly known as FGTS, alongside social contributions on those payments. Judge de Bruyn Junior noted that fiscal inspections revealed the image rights money was paid in monthly, fixed amounts detached from any genuine commercial exploitation of a player’s image, even when athletes utilized their own corporate entities.
The reversal sets aside a first-instance decision that had initially ruled in favor of Palmeiras and ordered the National Treasury to pay R$ 385,612.58 in legal fees. With the new judgment, the federal court has fully re-established the collection demands initiated by the tax authorities.
Club Prepares Further Appeals in Brasília
Palmeiras’ legal department intends to contest the latest ruling by filing a further appeal with the Superior Tribunal de Justiça in Brasília, according to UOL. The club maintains that the contracts governing image rights operated independently from standard employment contracts and involved no fraudulent labor practices or tax evasion.
As the case moves to a higher judicial level, the financial stakes remain significant for the club’s administration. The original assessment covers dues accumulated nearly two decades ago, and the upcoming proceedings will determine whether the federal tax collection will ultimately stand.
Related reading