LC 222/2025: what changed in Brazil’s Sports Incentive Law

Lei Complementar (complementary law) nº 222, of November 26, 2025, is Brazil’s new Sports Incentive Law. It repealed Law nº 11,438/2006 and took effect upon publication in the Diário Oficial da União (the federal official gazette) on November 27, 2025. If you donate, sponsor or propose projects, this article shows what changed, article by article, based on the text published by the Planalto, the Presidency’s official legislation site. This is how taxpayers and organizations in Brazil do it; readers abroad do not pay tax in Brazil, but the changes explain how sports projects there are funded today.

Why a complementary law

The old law was an ordinary law and dealt only with Imposto de Renda (income tax). The new one is a complementary law and, in art. 2, creates a model that applies to federal income tax and serves as a basis for states and municipalities to do the same with ICMS (state tax on goods and services) and ISS (municipal tax on services) (art. 15). That is why it sets an expiry date for state and municipal incentives: art. 24 says these laws cease to have effect on January 1, 2033.

This matters for Santa Catarina. PIE/SC (Santa Catarina’s Sports Incentive Program), which uses ICMS, already existed before LC 222 and continues under its own rules in Decreto nº 880/2025.

What stayed the same

• Limit for individuals: 7% of the imposto devido (tax due), shared with the children’s and elderly funds, the Lei Rouanet (the federal culture incentive law) and audiovisual projects (art. 9, § 1, II).
• Full return only: anyone who uses the desconto simplificado (simplified standard deduction) cannot deduct; the deduction only works with the modelo completo (full itemized return).
• Who can propose: non-profit legal entities or educational institutions (art. 4).
• Ban on paying professional athletes with incentivized money (art. 6, § 2).
• Dedicated account for each project, at Banco do Brasil or Caixa, both state-owned banks (art. 11).

What changed for companies

Under the old law, a company under lucro real (actual profit regime) could deduct up to 1% of the IRPJ (corporate income tax) due. LC 222 raised this limit in two stages:

• 2% up to calendar year 2027 (art. 23);
• 3% from 2028 (art. 9, § 1, I).

The amount is still not deductible as an expense from actual profit or from the CSLL, the social contribution on net profit (art. 9, § 2).

A month later came LC 224/2025, which in art. 4, § 4, item V, requires that only 90% of reductions in tax due be applied. Decree nº 12,861/2026, art. 2, § 10, says the company incentive must observe this reduction. In the most common reading, 2% becomes 1.8%. The exact effect depends on each company’s tax calculation: check with your accountant. The article LC 224/2025 and the cut in incentives covers only this topic.

Example with round numbers: a company with R$ 100,000 of IRPJ due had a cap of R$ 1,000 under the old law. Under LC 222, the cap in 2026 is R$ 2,000; with the 90% reduction from LC 224, R$ 1,800.

The 4% limit for social inclusion

This is the most talked-about novelty. Art. 9, § 4, allows the deduction to reach 4% of the tax due when the project serves vulnerable communities, under the terms of art. 6, § 1. This limit is shared with the Lei Rouanet (art. 26 of Law nº 8,313/1991) and the Lei do Audiovisual (the federal audiovisual incentive law), meaning it is a combined cap.

In practice, the 4% applies to companies; individuals keep the 7%. Decree nº 12,861/2026 (art. 2, § 2) repeats the rule. See details in social inclusion projects and the 4% limit.

Project levels

The old law spoke of types of sporting activity. The new one speaks of levels (art. 6):

1. Sports development, including educational sport as defined by Law nº 14,597/2023, the Lei Geral do Esporte (General Sports Law).
2. Sporting excellence.
3. Sport for life.

The decree (art. 5) explains that sports development is sport aimed at children and adolescents, focused on their overall development. This is the level where an after-school Muaythai project fits, for example.

New rules for proponents

Decree nº 12,861/2026 brought limits that were not in the old law:

• Administrative expenses capped at 15% of the project budget (art. 12).
• Sports development: at least 50% of participants must come from public schools (art. 18).
• Selection criteria that include not concentrating resources and giving priority to vulnerable communities (art. 22).
• A maximum of 6 projects per proponent per year (art. 23).

Approval only takes effect after it is published in an official act stating the title, institution, amount and fundraising period (LC 222, art. 10). The proponent cannot raise more than the approved amount.

Related parties

Art. 5 lists who cannot benefit: the sponsor’s own company, their spouse, relatives up to the third degree and affiliated companies. Art. 3, § 2, prohibits approving a project that benefits the sponsor itself. The rule prevents a company from sponsoring itself with public money.

Common mistakes during the transition

• Using the old law’s 1% limit in 2026 calculations.
• Ignoring LC 224/2025 and deducting the full 2% without checking.
• Thinking the 4% applies to individuals. It does not.
• Confusing LC 222 with PIE/SC. One uses income tax; the other, ICMS.
• Depositing before the official act of approval. Without it, there is no deduction.

What about Muaythai in Balneário Camboriú?

It is worth repeating the reminder we give throughout this series. Projeto Campeões do Futuro (“Future Champions”), Mestre Paulo Ribeiro’s free project for children after school hours, and FECAMTT, the Santa Catarina Traditional Muaythai Federation, do not have an approved project to receive income tax under LC 222/2025. What does exist is Muaythai nas Escolas (“Muaythai in Schools”), approved under PIE/SC, which receives ICMS from Santa Catarina companies. See the Muaythai nas Escolas page.

Individuals who want to support children in Balneário Camboriú with their tax have the city’s Fundo da Infância e Adolescência (FIA, the Children and Adolescents Fund) and projects already approved under the federal law, explained on the Support page.

How to do it today

1. If you are an individual, note your limit: 7% of the tax due. Nothing has changed for you.
2. If you have a company under actual profit, ask your accountant to recalculate the limit with LC 222 and LC 224 together.
3. If you run a sports organization, read Decree nº 12,861/2026 in full before putting together your next project: the 15% and 50% rules sink proposals.

This is how taxpayers in Brazil do it. If you live abroad, you do not pay tax in Brazil, but you can still support the project. Questions about the right option for your case? Talk to the Mestre.

This content is for information only and does not replace advice from your accountant. Rules may change: always check the wording currently in force.