A market exit creates several clocks at once: the legal cutoff, customer repayment, accounting close, tax recognition, contract termination and record retention. The purpose of the control room is to make those clocks reconcilable without pretending they all strike on the same date.
Run the exit as eight controlled workstreams, not one journal entry
| Workstream | First decision | Owner | Close evidence |
|---|---|---|---|
| Player funds | Freeze the population and separate liabilities from company cash | Treasury and operations | Player-level reconciliation and bank trace |
| Revenue and tax | Define event and reporting cutoffs | Controller and Brazil tax | GGR bridge, returns and tax calendar |
| Assets | Identify impairment, derecognition and DTA questions | Controller and auditor | Asset register, CGU model and tax controls |
| Contracts | Inventory termination rights, services and penalties | Legal and procurement | Contract-by-contract decision log |
| Intercompany | Stop unsupported allocations and map actual changes | Group tax and TP | FAR before/after and reconciled balances |
| Records | Preserve systems, reports and accountable custodians | Compliance and IT | Retention index and recovery test |
The Brazil betting decision guide owns the overall legal and congressional map. This page begins where that map becomes execution: who closes each number, under which rule and with what evidence.
Player balances are liabilities, not free operating cash
| Population | Question | Evidence | Do not combine with |
|---|---|---|---|
| Deposited balance | Which identified player owns the amount? | Wallet, identity, bank and transaction ID | Operator cash |
| Unsettled bet | Did the event reach the statutory cutoff and what status applies? | Bet ID, event time, status and rule | GGR already earned |
| Prize payable | Was the result determined and the amount due? | Result, calculation and beneficiary | Refund of principal |
| Failed refund | Why did payment fail and what remediation remains? | Attempt, rejection code and contact trail | Revenue or breakage |
| Chargeback | Is the claim duplicated in the player ledger? | Acquirer file, wallet and settlement | A second customer credit |
MP 1,394/2026, articles 7 through 9, distinguish unsettled bets and prizes, require liquidity and segregation for player funds, and govern refund execution and reporting. A media estimate of total balances cannot replace the operator ledger. Headquarters should demand a player-level bridge from opening liability to payment, failed payment or another documented status.
GGR belongs in a different bridge. Customer deposits, stakes, prizes, refunds, chargebacks and operator revenue answer different questions. Combining them can distort both cash availability and Brazilian tax reporting.
Close GGR, taxes and returns on the event date each rule recognizes
| Ledger | Cutoff question | Reconciliation | Approver |
|---|---|---|---|
| Betting events | Accepted, settled, voided or open at cutoff? | Platform event log to player ledger | Operations |
| Revenue | Which performance and measurement rule was met? | GGR engine to general ledger | Controller |
| Federal taxes | Which liabilities arose before or during transition? | Tax calculation to accounting and return | Brazil tax |
| Municipal and payroll | Which services, people and jurisdictions remain? | Invoice/payroll population to filings | Local owners |
| Regulatory reporting | Which reports and corrections remain due? | SIGAP/report inventory to protocol | Compliance |
Article 10 of the MP preserves tax, regulatory, monetary, reporting and documentary obligations relating to the prior period and the transition. “The activity stopped” is therefore not a close criterion. The company needs a tax calendar that identifies the event, period, return, payment, evidence and accountable owner for each surviving obligation.
The bridge should also explain adjustments between management GGR, statutory books, tax bases and regulatory reporting. A difference may be valid; an unexplained difference is a control failure.
The authorization asset follows an accounting sequence, not the lawsuit headline
| Decision | Rule | Evidence | What it does not prove |
|---|---|---|---|
| Impairment indicator | CPC 01, item 9 | Legal event and recoverability model | Full immediate write-off in every case |
| Unit of account | Asset or relevant CGU | Cash flows, platform, brand and contracts | That the licence can be tested in isolation |
| Derecognition | CPC 04, items 112–113 | No expected future benefit from use or disposal | Recognition of a Government receivable |
| Legal claim | CPC 25, items 31–35 | Probability, enforceability and realization | Cash or an asset on filing day |
The regulatory event is a strong impairment indicator, but the measurement still depends on the asset or cash-generating unit, scenarios and documented assumptions. Derecognition is a separate question. A claim for refund or indemnity is separate again and cannot be used to keep an unrecoverable operating asset alive.
The dedicated R$30 million licence-fee analysis reconciles legal quantum, carrying amount, tax basis and later cash recovery. Headquarters should not copy any one of those figures into the other three.
Book loss, Brazilian tax deduction and usable tax benefit are three different values
| Event | Book | Brazilian tax control | Cash consequence |
|---|---|---|---|
| Amortization | Expense over useful life | Test article 41 conditions and deductions taken | Only through taxable profit |
| Impairment | CPC 01 loss | Article 32 add-back while unrealized | No immediate refund |
| Derecognition | Remove the remaining asset | Test realization of prior add-backs and remaining basis | May create or increase a tax loss |
| Tax losses | No book asset by itself | General 30% future-use limitation | Depends on future taxable profit |
| Deferred tax asset | CPC 32 recognition test | Support recoverability with credible profits | Not cash and may require reduction |
Article 32 of Law 12,973/2014 generally delays the Actual Profit effect of an impairment until disposal or derecognition, for the portion not reversed. Article 41 separately addresses qualifying amortization of intangible rights, and article 50 extends specified rules to the CSLL base. The file needs a roll-forward of original cost, accounting amortization, tax deductions, impairment add-backs, reversals and the remaining tax basis.
A nominal 34% combined rate is not a cash refund. Under Law 9,065/1995, future use of losses is generally limited to 30% of adjusted profit. CPC 32 requires probable future taxable profit for a deferred tax asset; a wind-down entity may have no economic path to use it.
Contracts and intercompany charges must follow the service or asset that actually remains
| Stream | Decision | Evidence | Tax question |
|---|---|---|---|
| Technology and cloud | Stop, retain for wind-down or migrate? | SOW, logs, users and benefit | Service nature, import taxes and cutoff |
| Brand and IP | Was a right transferred or merely no longer used? | Ownership, licence, territory and access | Royalty, disposal or no transaction |
| Marketing and sponsorship | What was delivered, removed or refunded? | Performance, acceptance and termination | Revenue, expense and recovery |
| Employees and contractors | Terminate, retain or transfer functions? | Role, date, obligation and payment | Payroll, provision and deductibility |
| Group services | What benefit continues during transition? | Deliverable, hours and recipient | Arm’s-length charge and withholding |
| Exit charge | What function, asset, risk or profit potential moved? | FAR before/after and valuation | Transfer pricing and payment character |
Do not allocate every exit cost to Brazil because the local entity operated the business, and do not push every loss to headquarters because it has deeper pockets. The transaction must follow functions, assets, risks, contracts, conduct and realistic alternatives. The English guide to transfer pricing for the Brazil market exit owns that separate analysis.
Close-file update: 27 September 2026. Campaign removal, commission reconciliation and the specific liability conditions belong in the Brazil betting advertising and affiliate liability guide. Assign the wider supplier workstream through the Brazil betting supply chain contract and tax matrix: identify the counterparty, performance cutoff, invoice, withholding review, accounting entry and evidence owner, then reconcile the result with this operator close.
Preserve a retrievable record, not a folder that nobody can reconstruct
| Evidence family | Minimum content | Control | Recovery test |
|---|---|---|---|
| Player and transaction data | Wallet, bet, result, refund and payment IDs | Immutable extract and data dictionary | Reproduce a sample end to end |
| Regulatory | Authorization, reports, notices and protocols | Official-source index | Open every referenced act |
| Accounting and tax | Ledgers, calculations, returns and e-Lalur/e-Lacs | Version and sign-off | Reperform the bridge |
| Contracts | Executed terms, amendments, notices and settlements | Counterparty owner | Trace payment to obligation |
| Board and scenarios | Assumptions, decisions and reopening triggers | Dated approval | Explain why the conclusion changed |
Article 10 of the MP requires records to remain complete and accessible to competent authorities for at least five years. That minimum does not shorten longer tax, corporate, labour, data or litigation periods. Retention should follow a documented schedule and legal holds, with named custodians and a test that a third party can retrieve the record.
Close on the effective rule, but predefine what would reopen each conclusion
| Scenario | Immediate accounting/tax posture | Reopening trigger | Owner |
|---|---|---|---|
| MP converted substantially as issued | Execute the full exit close | Conversion law and implementing act | Brazil legal and tax |
| MP rejected or lapses | Do not reverse entries on expectation alone | Official congressional act and restored legal position | Legal and controller |
| Injunction for the company | Apply only its scope, term and beneficiary | Official order and service | Litigation counsel |
| Partial refund or settlement | Keep claim and asset recognition separate until criteria are met | Enforceable instrument and collectability | Legal, controller and tax |
| No relief | Complete derecognition and tax controls when supported | Final legal and factual status | Controller and tax |
The factual cutoff is 26 September 2026. This page does not predict the vote, extend another company’s court order, recognize a receivable or determine an individual tax deduction. It provides the governance structure that allows each later event to change only the conclusions it actually affects.
Give headquarters one bridge from player balances to the Brazilian tax return
The TaxUp Team builds the close calendar, workstream ownership, book-to-tax bridge, contract inventory, evidence index and scenario triggers for the Brazilian exit.
Set up the Brazil exit control roomPrimary sources: MP 1,394/2026, articles 7 through 10; CPC 01, item 9; CPC 04, items 112–113; CPC 25, items 31–35; Law 12,973/2014, articles 32, 41 and 50; Law 9,065/1995, articles 15–16. Cutoff: 26 September 2026.
Frequently asked questions
Are player balances company cash in a Brazil betting exit?
Does impairment of the Brazilian licence create an immediate tax deduction?
Can the group recognize a receivable when it files a refund claim?
Should headquarters wait for Congress before closing the period?
Continue through the Brazil betting decision file
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