Sustainability that creates value: how fashion brands can benefit from tax incentives

Sustainability has moved beyond image-building — it’s now an economic and strategic pillar for modern fashion brands. What many businesses overlook is that Brazilian law already provides legal and tax mechanisms that reward sustainable practices.

The National Solid Waste Policy (Law No. 12.305/2010) promotes shared responsibility throughout the product life cycle. Fashion brands implementing recycling, waste reduction, or reverse logistics programs may qualify for tax reductions or exemptions, particularly under the “ICMS Ecológico” framework, regulated by Decree No. 10.387/2020 and complementary state legislation.

Furthermore, companies investing in research, development, and sustainable innovation can access benefits from the “Lei do Bem” (Law No. 11.196/2005) — including deductions on Corporate Income Tax (IRPJ) and Social Contribution on Net Profit (CSLL).

In the fashion sector, these incentives can apply to:

• Development of biodegradable or recyclable fabrics;

• Launch of upcycling collections or inventory repurposing;

• Implementation of eco-efficient production processes;

• Partnerships with certified suppliers or social cooperatives.

Beyond financial advantages, these legal strategies elevate brand reputation, demonstrate environmental commitment, and drive international growth. A Fashion Law attorney plays a vital role in identifying these opportunities, structuring compliance, and ensuring documentation meets legal requirements. Without proper guidance, brands risk losing available tax benefits or failing to comply with sustainability criteria. For this, count on the expertise of our office.