The so called Sports Incentive Law has become an important
starting point for the encouragement of Brazilian sport as a whole
as it creates guidelines by which fund raising can be conducted as
part of a fiscal benefit for the patron. The benefits of this
initiative for needy communities, promising athletes and private
business are immense.
The innovations which the Sports Incentive Law has brought about
since it was sanctioned on December 29, 2006, can be seen by the
way in which it authorizes both public and private sports-focused
companies with non-economic ends to seek funds from other companies
or individuals. These companies are categorized by the law as being
proponent companies with a framework suited to the presentation of
its sports projects to the Ministry of Sport.
The fiscal benefits, which are the object of the legislation
under discussion, come in the form of a tax reduction, where
companies that are assessed upon their taxable income may direct 1%
(one percent) of tax due to the direct support of sports and
para-sports projects that have been previously approved by the
Ministry of Sport, through sponsorships or donations. Individuals
meanwhile may direct up to 6% (six percent) of their income tax to
similar such projects under the same system.
It is necessary to recognize the focus given by the Sports
Incentive Law to educational and community based sports, areas
which have been largely forgotten over the past few decades in
Brazil, and which have not met the intentions of individuals or
companies in driving sport forward nationally.
In order for there to be greater transparency and monitoring of
the large sums that are to be applied by both individuals and
companies, the law established that sports and para-sports projects
should be previously approved by a Technical Commission. This
commission is made up of National Sports Council-recommended
representatives of the sports and para-sports sectors themselves
and from the Federal Government.
"Private companies have been shown an effective means of
providing assistance in the evolution of sport nationally since the
Law provides for concrete conditions whereby athletes',
associations' and individual projects' financial conditions
do not stand in the way of development," says Dr. Gustavo
Normanton Delbin, specialist in Sports Law and Head of the relevant
department at Felsberg e Associados. "This in turn raises the
quality of sport in Brazil whilst contributing to the development
of the country's young people."
Projects should be drawn up and submitted through the website of
the Ministry of Sport (http://portal.esporte.gov.br/), with a detailed
description of all the intended activities and related
"The correct handling of the project submission process
paves the way for very positive returns, both for a company's
financial statements as well as the benefit it provides for the
local community," explains Dr. Gustavo. "It's not a
straightforward process though, and we at Felsberg e Associados
have assisted a number of companies in pursuing the benefits that
are there waiting for both them and young Brazilians."
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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