Income Tax and Cultural Awards

Incidence, Non-incidence, or Exemption?

Abstract

The Constitutional Amendment No. 71/2012 introduced the National Culture System, establishing, among its principles, the promotion of the production, dissemination, and circulation of knowledge and cultural assets. After more than a decade lacking regulation on cultural funding, Law No. 14.903/2024 (Regulatory Framework for Cultural Funding) has provided greater legal certainty in this area. However, uncertainties remain regarding the taxation of cultural awards, particularly concerning the incidence of income tax, creating insecurity for managers and cultural agents. This research aims to analyze whether the patrimonial increase resulting from cultural awards to cultural agents constitutes a taxable event for income tax purposes or whether it falls under a legally established exemption based on the nature of the income or the taxpayer. The methodology includes basic, qualitative, and exploratory research based on bibliographic and documentary analysis, comparing Tax Law and Cultural Rights. At the conclusion of this study, it is determined that, given the legal nature of cultural awards as unconditional donations, the financial transfer constitutes a patrimonial transfer that is inherently non-compensatory. Therefore, it should not be considered as income, earnings of any kind, revenue, or proceeds for tax purposes and, consequently, does not constitute a taxable event for income tax purposes.