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Sports Incentive Law

Since being passed in 2007, the Sports Incentive Law has allocated over R$ 869 million for three areas: projects aimed at sport as leisure, sport as an education instrument and high performance.  Therefore, it has significantly contributed to ensure that thousands of Brazilians have access to sport activities.

With the Sports Incentive Law, natural persons and legal corporations became entitled to encourage sport projects, be them Olympic, Paralympic or other, through sponsorship deals or donations. The amounts donated may be deducted from their income tax.

The bill establishes that natural persons may deduct up to 6% from their income tax. The tax break also competes with other fiscal incentives, without actually establishing specific limits. In other words, the tax break may be used fully for sport, it is up to the taxpayer.

For legal corporations inscribed in the real profit tax system, the Sports Incentive Law allows for up to 1% to be deducted from income tax. Legal corporations taxed based on their real profit are done so because of Law No 9,178/98, which generally applies to multinationals and conglomerates from the banking sector, industrial enterprises, airlines, telecommunication companies, among others. Contrary to natural persons, the benefit does not compete with other fiscal incentives.

Projects linked to professional level high performance sports (characterised by a formal work contract between an athlete and a sport organisation) are not allowed to have resources collected as a result of the Sports Incentive Law, allocated to them. In addition, the legislation does not allow for resources to be allocated for the purchase of advertising space.