In a significant development for non-profit associations in Brazil, the Federal Revenue has announced through Normative Instruction RFB No. 2,307/2026 that these entities will be exempt from the linear reduction of fiscal benefits as stipulated by the Complementary Law No. 224. This update clarifies that tax exemptions on income tax, CSLL, and Cofins that apply to these associations are unaffected by the cuts, ensuring that their financial viability remains intact in the face of varying economic conditions.

However, the same regulation has revoked a provision that previously protected donations made by individuals and legal entities to non-profit organizations from being cut. According to the Federal Revenue, this exemption now only applies to benefits directly enjoyed by qualified entities, such as Civil Society Organizations (OSCs) and Social Organizations. As a result, donations are still subject to the general rule of linear reduction, which could have implications for funding received by these non-profits from external sources.

The changes highlighted in this normative instruction reflect the government's attempt to balance fiscal responsibility with the need to support civil society. While the exemption for the associations themselves helps preserve their operational capabilities, the reduction of benefits for donations could discourage philanthropy and reduce financial assistance available to these organizations, potentially affecting their outreach and effectiveness in serving the community.