Keywords: Tax Consent Decrees, TACT, ICMS

On June 12, 2015, State Law No. 7.020/2015 was published in the Official Gazette after approval by the Governor of the State of Rio de Janeiro to authorize the Executive Branch to enter into Tax Consent Decrees ("TACT") waiving or reducing penalties and interest related to ICMS (state level value added tax) debts.

The program applies to debts arising from tax assessments, and also debts resulting from voluntary disclosure by taxpayers, provided that the same are being discussed on the grounds of conflicts in the interpretation of laws. In addition, only debts in excess of R$ 10,000,000.00 (ten million Brazilian Reals) can be included in the program.

The payment agreed under a TACT may be made with the exclusion of up to 100% of the relevant fine and a reduction of up to 60% of the default interest in case of payment in a lump sum. For the cases in which the debts result solely from tax fines, the reduction is limited to 40% of the default interest as well as the fine.

Please note that the regulation of the program by the State of Rio de Janeiro has not been issued so far.

Originally published 19 June 2015

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