New ICMS Special Installment Program (PEP) – São Paulo
Less than 03 (three) years after the last tax installment program with favorable conditions, the State of São Paulo grants again a new opportunity for taxpayers settling their ICMS debts.
Although practically identical to the previous one, which allows again reduction of fines up to 75% and default interest by up to 60%, this new program does not allow settlement of ICMS debts with accumulated credits, refunds or with court order of payment (“precatórios”). In addition, the São Paulo State insists on using in this new program interest rates for updating ICMS debts higher than SELIC, which can be challenged in court.
Find below a summary of this new tax installment program, which was issued by the State of São Paulo through Decree No. 64,564 / 2019 on November 5, 2019
- Payment in a single installment, with a reduction of 75% of the updated value of the punitive and late payment fines, and 60% of interest on the tax and on the punitive fine;
- Payment of the debt in up to 60 consecutive monthly installments, with a reduction of 50% of the updated value of the punitive and late payment fines and 40% of the amount of interest on tax and on the punitive fine;
- In case of ICMS debts charged in tax assessment not yet enrolled as an outstanding debt, additional cumulative discounts to those mentioned above may be granted on the punitive fine;
- In case of inclusion of ICMS debts owed under the substitution regime, the debt may be paid in up to 6 consecutive monthly installments;
- Tax debts related to the 2% surcharge for the State Fund to Combat and Eradicate Poverty cannot be paid in installments.
Interest applicable in case of installment
- Up to 12 installments: 0.64% per month;
- From 13 to 30 installments: 0.80% per month; and
- From 31 to 60 installments: 1% per month.Note: interest rates that are higher than SELIC could be challenged in court.
Maturity of payment of the first installment or single installment
- On the 25th of the current month, for adhesions that occur between November 7th and 15th, 2019;
- On December 10, for adhesions that occur between November 16 and 30;
- On December 20, for adhesions that take place between December 1st and 15th, 2019;
- In the event of payment in installments, the installments subsequent to the first installment will mature on the same day as the months following the first installment;
- The following will not be accepted for settlement of tax debts: (i) accumulated credits; (ii) refunds and (iii) court order of payment (precatórios).
- The amount of judicial deposits made spontaneously as guarantee for ICMS debts included in the installment payment may be deducted from the debt to be paid, provided that in the lawsuit there was no final decision favorable to the State of São Paulo.
- With respect to tax debts enrolled as outstanding debts, the access to PEP should correspond:
- to all debts of the same Tax Debt Certificate; and,
- all Debt Certificates when grouped under the same tax execution.
- The act of installment payment or payment in one installment of debts under the PEP implies:
- irrevocable and irreversible confession of the tax debt; and,
- express waiver of any administrative or judicial appeal, as well as withdrawal of current proceedings, and must be evidenced within 60 days from the date of payment of the first installment. Such total or partial withdrawal of lawsuits does not exempt the taxpayer from any procedural costs, legal expenses and attorney’s fees due.
- In addition to the above, the taxpayer must comply with the following requirements, otherwise it will be excluded from PEP:
- should not incur in non-payment of 04 or more installments (consecutive or not), except for the first installment;
- should not incur in non-payment of up to 3 installments, after 90 days after the last installment due; and,
- the failure to prove, within the deadline, the withdrawal and payment of the costs and charges of any actions, defense against tax enforcement actions, challenges, defenses and appeals filed in court regarding such debts.
The adhesion to the PEP can be made from November 7th 2019 to December 7th 2019, by the website: https://www.pepdoicms.sp.gov.br.
Dias Carneiro is available to advise you regarding the analysis of the legal viability for adhering to the PEP, in light of the specificities of the legislation and of your case.