Odebrecht rift raises debate about taxation of plea-bargain fine
Marcelo Odebrecht paid R$65.6 million in income tax over the entire financial package he received from the Odebrecht group, in a total of R$217 billion, to sign a plea deal with the Federal Prosecution Service (MPF). The tax payment was made in March 2019, after the former CEO consulted tax agency Federal Revenue. The total disbursement includes 27.5% income tax over the fine that authorities imposed on Marcelo, which the company paid.
Such information, uncovered amid the escalation of the dispute between the group and its former CEO, raised a tax ghost now haunting the other 76 executives who agreed to provide information in exchange of leniency. They all had their fines paid by the company, but only Marcelo paid the tax.
Marcelo received a differentiated package from Odebrecht, as demand to accept the agreement with authorities. Of the package's total, R$73.4 million referred to the fine imposed by the MPF.
The conglomerate's heir, first-born of Emilio Odebrecht, made the consultation to the Federal Revenue in 2017. He got the response in December 2018 and paid the adjusted tax in March 2019, sources say.
When it made a leniency agreement for the company and its 77 executives, Odebrecht studied the tax issue - just like other companies in the same situation, targets of Operation Car Wash, people familiar with the matter say. The leniency deal of the company is the sum of the individuals' plea bargains and the agreements are therefore interdependent. Because of this, Odebrecht legally shares the executives' accountability. The prevailing understanding is that, because of this, the payments of individuals' fines are of compensating nature, and thus should be tax exempt.
There is a practical difference between Marcelo's case and of the other executives. The former CEO was the only one who received sums from the group to sign the plea deal, on December 2 of 2016. The other had their expenses - fines and lawyers - paid by the company, but without deposits made in their accounts.
Marcelo demanded in November 2016 that the company deposited in advance R$70 million to him, to compensate loss of assets, and R$73.4 million more of the fine he should pay to authorities. And he received that amount. None of these amounts went to personal accounts of the former executive, but deposited on behalf of his wife and daughters. That month, therefore, he received R$143.4 million.
The sum was increased right after, with an addendum to the original agreement...
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