On July 26, the Ministry of Finance presented a bill that aims to create a new regime of donations with tax benefits in order to facilitate the financing of civil society organizations (CSOs). The new regime includes objectives already recognized in existing special laws and incorporates others that were previously excluded, such as environment, health, diversity, worship and human rights.

If enacted, donations may be deducted from the income tax base, will be exempt from donation tax and will be exempt from the judicial approval process. In addition, the donated goods will not be subject to Value Added Tax (VAT), while the importation of donated goods will be free of duties, customs duties, taxes or fees.

The entities that wish to receive donations under the new regime and meet the requirements for such purpose must request their registration in a registry to be kept by the Technical Secretariat of the Undersecretariat of Finance. The bill also contemplates the creation of a digital portal of public access that will contain the information provided by the registered entities, the donations received, the annual reports of activities, projects and programs, among other information.

In the rationale for the bill, the government recognizes that the context of the pandemic made it difficult for CSOs to obtain funding and that they are key players in the identification and solution of social problems and in the promotion of diverse interests and public goods.