Income tax exemption up to R$ 5,000 in 2026: can you still donate?

People who earn up to R$ 5,000 a month stopped paying Imposto de Renda (income tax) from 2026 and, as a result, have no imposto devido (tax due) to allocate to sports or to the funds. The incentivized deduction reduces a tax that has to exist in the first place. This is how taxpayers in Brazil do it; readers abroad do not pay tax in Brazil, but the logic explains why some Brazilian supporters can no longer use the incentive. This article explains the new band created by Law nº 15,270/2025, who still pays and how much they can donate.

What Law nº 15,270/2025 changed

The law did not change the progressive tax table. It created a tax reduction that brings the amount to zero for lower incomes and shrinks until it disappears. The rules were added to Law nº 9,250/1995:

• Art. 3-A (monthly): a reduction of up to R$ 312.89 for anyone earning up to R$ 5,000.00 a month, which brings the tax to zero; between R$ 5,000.01 and R$ 7,350.00, the reduction falls to zero.
• Art. 11-A (annual): a reduction of up to R$ 2,694.15 for taxable income of up to R$ 60,000.00 a year; between R$ 60,000.01 and R$ 88,200.00, the reduction is R$ 8,429.73 minus 9.5575% of income; above R$ 88,200.00, there is no reduction.

Law nº 15,270 also raised the cap of the desconto simplificado (simplified standard deduction) to R$ 17,640.00 from calendar year 2026 (art. 10 of Law nº 9,250). See full or simplified return for donating.

Why exempt people cannot allocate

The deduction under LC 222/2025 (a Lei Complementar, or complementary law), art. 9, is calculated on the tax due: up to 7% for individuals, combined with the children’s and elderly funds, the Lei Rouanet (the federal culture incentive law) and audiovisual projects. If the tax due is zero, 7% of zero is zero.

This is not a trick or a loss. The person already keeps the money they used to pay in tax. They can donate whatever they like, but without a deduction, because there is nothing to deduct from.

Three bands, three situations

Band 1: up to R$ 60,000 a year (R$ 5,000 a month). Zero tax. Nothing to allocate with an incentive.

Band 2: between R$ 60,000 and R$ 88,200 a year. Reduced tax. On whatever is left, the 7% applies.

Band 3: above R$ 88,200 a year. No reduction. The calculation is the usual one.

Example with round numbers

Imagine someone with R$ 72,000 of taxable income in the year (R$ 6,000 a month).

1. The annual reduction is R$ 8,429.73 − 9.5575% × R$ 72,000 = R$ 8,429.73 − R$ 6,881.40 = R$ 1,548.33.
2. Suppose the tax from the table, after deductions, is R$ 4,000. With the reduction, the tax due falls to R$ 2,451.67.
3. 7% of R$ 2,451.67 = about R$ 171 for sports and funds.

Now someone with R$ 150,000 a year: no reduction. If the tax due is R$ 20,000, they can allocate up to R$ 1,400 (7%). Someone with R$ 10,000 of tax due can allocate up to R$ 700. The full calculation is in how much can I allocate.

The reduction amounts depend on your situation: the Receita Federal (federal tax authority) software does the calculation. Use the example only to understand the logic.

What changes for people in the reduction band

Before the law, someone earning R$ 6,000 a month had a higher tax due and, therefore, a higher 7%. Now the tax has fallen, and the room to donate with an incentive has fallen with it. What they gained in take-home pay is far more than what they lost in deductions.

If this person wants to keep supporting a project, the difference is small: part of the donation will be deductible, part will not.

Common mistakes

• Donating expecting a deduction when the tax due is zero.
• Using the monthly band (R$ 5,000) for the annual calculation without considering the 13th salary (the annual year-end bonus), vacation pay and other taxable income.
• Forgetting that the reduction applies from calendar year 2026, declared in 2027.
• Confusing a tax exemption with not having to file: anyone with other obligations still files a return.
• Calculating the 7% on the tax before the art. 11-A reduction.

What about Muaythai in Balneário Camboriú?

The usual reminder: 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 receive income tax, either from those who pay it or from those who are exempt. Muaythai nas Escolas (“Muaythai in Schools”) is under PIE/SC (Santa Catarina’s Sports Incentive Program), which uses ICMS (state tax on goods and services) from Santa Catarina companies: see Muaythai nas Escolas.

People who are exempt can help in other ways, and those ways count: taking a student to training, spreading the word, donating equipment. The options are on the Support page. Those who still pay tax have the Balneário Camboriú FIA (Fundo da Infância e Adolescência, the Children and Adolescents Fund) and the projects approved under the federal Sports Incentive Law.

How to do it today

1. Add up your taxable income for the year and see which band you fall into.
2. If it is above R$ 60,000, estimate your tax due with the art. 11-A reduction.
3. Calculate 7% and decide whether donating with an incentive is worth it.
4. If you are exempt, choose another way to help.

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. Want to know what Projeto Campeões do Futuro needs besides money? 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.