One of the main opportunities for Brazilians to do good comes up against ignorance. Donations of part of the Individual Income Tax (IRPF) for social projects should total only R$ 250.25 million this year, according to an estimate by the Federal Revenue in the General Budget of the Union for 2022.
According to a survey by Itaú Social, the social projects arm of the bank of the same name, the volume donated could reach R$ 5 billion if all taxpayers used the mechanism, which allows the reduction of up to 6% of the Income Tax due or the up to 6% of the refund, limited to 3% for each type of social action.
IRPF portion donations to social, cultural and sports projects have grown year after year. The total, however, is still small in the face of potential. In 2020, the Federal Revenue Service failed to collect R$ 191.64 million from the Individual Income Tax because of these donations. In 2021, the total increased to BRL 229.27 million.
This year, the Tax Authorities expect an increase in donations, even with the reduction in donation possibilities. Until 2021, the taxpayer could deduct, from the Income Tax, donations to the National Programs to Support the Health Care of Persons with Disabilities (Pronas/PCD) and to Support Cancer Care (Pronon), but the possibility has been suspended. In this case, the deductions were limited to 1% of the tax calculated on the return and were not subject to the global limit of 6%.
This was because the laws that authorized the donation of individuals to Pronas/PCD and Pronon lost their validity and were not renewed. As of this year, this abatement mechanism is only available to companies that pay the Corporate Income Tax.
Benefited shares
Altogether, five types of actions can receive donations in the income tax declaration: funds linked to the Statute of Children and Adolescents, funds linked to the Statute of the Elderly, National Culture Support Program, sports incentive projects and incentive projects to audiovisual activity.
In the case of funds for the elderly and for children and adolescents, the donation can be made directly in the declaration, with the amount being paid in the first quota or single quota of the tax. The generator program itself will automatically include the amount of donations in the list of Income Tax deductions.
Limits
Total donations are limited to 6% of the tax owed or refund, with up to 3% used for each category. If desired, the taxpayer can donate more, but the amount cannot be deducted from the tax payable.
In addition to direct donations, the taxpayer can deduct, within the global limit of 6%, donations for three types of actions carried out in the previous year: cultural incentives (such as donations, sponsorships and contributions to the National Cultural Fund), incentives for audiovisual activity , sport incentives.
how to donate
When filling out the income tax return, the taxpayer can choose the fund for the elderly or the Statute of Children and Adolescents to which they want to donate and the sphere of action – national, state or municipal. However, it is not possible to choose an entity. It is necessary to choose the complete model of the declaration, check the amount of tax due and confirm the option “Donations Directly on the Declaration”.
The list of funds that can receive taxpayer money appears in the program that generates the declaration, but it is not possible to donate to a specific entity. Once the donation is selected, the system will issue a Federal Revenue Collection Document (Darf), which must be paid by the last day of delivery of the declaration, along with the Income Tax. The contribution cannot be paid in installments.
