Keywords: ICMS, special instalment program, PEP, tax debts

By means of Decree nº 58.811/12, published in the Official State Gazette of 28/12/2012, the State of Sao Paulo implemented the Special Installment Program (PEP) for ICMS tax debts.

PEP provides for discounts on the settlement of ICMS liabilities arising from events that occurred up to 31.07.2012, as follows:

(A) if the payment is made in a lump sum, a 75% reduction in the updated value of punitive and late payment fines is granted, together with a 60% reduction in interest, or

(B) if the payment is made in up to 120 consecutive monthly installments, a 50% reduction in the updated value of punitive and late payment fines is granted, together with a 40% reduction in interest.

The settlement of ICMS debts, whether already assessed or not, or enrolled as outstanding debt or not, also applies to debts ​​spontaneously reported to the tax authorities and certain ICMS liabilities of taxpayers subject to the rules of the National SIMPLES Scheme.

Taxpayers may apply for the PEP from March 1 to May 31, 2013.

Observations in this update about Brazilian law are by Tauil & Chequer Advogados. They are not intended to provide legal advice to any entity; any entity considering the possibility of a transaction must seek advice tailored to its particular circumstances.

Visit us at Tauil & Chequer

Founded in 2001, Tauil & Chequer Advogados is a full service law firm with approximately 90 lawyers and offices in Rio de Janeiro, São Paulo and Vitória. T&C represents local and international businesses on their domestic and cross-border activities and offers clients the full range of legal services including: corporate and M&A; debt and equity capital markets; banking and finance; employment and benefits; environmental; intellectual property; litigation and dispute resolution; restructuring, bankruptcy and insolvency; tax; and real estate. The firm has a particularly strong and longstanding presence in the energy, oil and gas and infrastructure industries as well as with pension and investment funds. In December 2009, T&C entered into an agreement to operate in association with Mayer Brown LLP and become "Tauil & Chequer Advogados in association with Mayer Brown LLP."

© Copyright 2012. Tauil & Chequer Advogados, a Brazilian law partnership with which Mayer Brown is associated. All rights reserved.

This article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.