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 expenses.
"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."
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