Keywords: São Paulo, debt amnesty, ICMS

On May 13th, 2014, Decrees Nos. 60.443/14 and 60.444/14 of the State of São Paulo were published in the Official Gazette. The Decrees granted new incentives for debt payment.

Decree No. 60.443/14 refers to general state debts while Decree No. 60.444/14 was issued specifically for ICMS (VAT) debts.

The debts covered by Decree No. 60.443/14 must be registered as collectible in the state liability certificate (even if it has not been charged in tax foreclosure yet), which is not required by Decree No. 60.444/14.

While Decree No. 60.443/14 allows the payment of overdue debts up to November 30th, 2013, Decree No. 60.444/14 allows the payment of debts expired until December 31st, 2013.

Both Decrees establish the same reductions for cash and installment payments: 75% of the fines and 60% of the interest for payment in cash and 50% of the fines and 40% of the interest (being applied on each installment) for payment in installments. Nevertheless, Decree No. 60.443/14 only allows the payment in 24 (twenty four) installments, while Decree No. 60.444/14 allows the payment in 120 (one hundred and twenty) installments.

For the debts specified in Decree No. 60.443/14, the taxpayer may apply to the program from May 19th, 2014 to August 29th, 2014. Decree No. 60.444/14 (ICMS) establishes that the taxpayer file its application to the program from May 19th, 2014 to June 30th, 2014.

As usual, application to the program is conditioned to the recognition of the debt and the renunciation of any administrative or judicial discussion on the matter. The petition must be presented 60 (sixty) days after the payment of the whole debt in cash or the payment of the first installment.

For tax assessments that are not yet on state liability certificates, Decree No. 60.444/14 (ICMS) grants additional reductions on the penalty fines: i) 70% if the taxpayer pays the debt in cash within 15 (fifteen) days after the notification; ii) 60% if the taxpayer pays the debt from 16 (sixteen) to 30 (thirty) days after the notification; and iii) 45% for the remaining cases.

Decree No. 60.444/14 (ICMS) also allows the payment of the debts by the utilization of judicial deposits made as warranty, given that any possible favorable decision for the State of São Paulo has not become res judicata. In which case, after the utilization of the deposit, the taxpayer can pay any remaining amount with the benefits of the Decree. If the updated amount of the deposit is higher than the debt (calculated with the benefits), the difference will be refunded to the taxpayer.

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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.