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São Paulo approves Tax Transaction for debts registered in active debt

December 18, 2023

By Guilherme Martins and João Pedro Riccioppo Cerqueira Gimenes

Law No. 17,843/2023 was published, creating the “Acordo Paulista” program in the State of São Paulo, capable of promoting better conditions for carrying out a settlement transaction for disputes related to the collection of Public Treasury credits, of a tax or non-tax nature, registered as active debt in the State of São Paulo. 

The new legislation reinforces the Government's ideal of "consensuality", of proposing the creation and development of environments that favor and promote the reduction of excessive litigation in the State. Furthermore, for the purposes of applying the aforementioned law, the principles of equality, tax capacity, transparency, morality, reasonable duration of proceedings and efficiency will be observed, among others, and, safeguarding information protected by confidentiality, the principle of publicity.

Basically, the aforementioned law provides for two types of transactions: (i) by adhesion, according to notices to be published by the Attorney General's Office of the State of SP (“PGE-SP”) and (ii) by individual or joint proposal initiated by the debtor or the State. 

Thus, such modalities may contemplate, individually or cumulatively, the granting of discounts on fines, interest and other legal additions of up to 65% of the total amount transacted and with a repayment term of up to 120 months. Depending on the case, fees may even be included, related to credits to be transacted that are classified as irrecoverable or difficult to recover. The criteria will still be established in an act of the State Attorney General. 

It is also worth highlighting the possibility of using accumulated credits and ICMS reimbursement, including in cases of tax substitution (“ICMS-ST”) and rural producer credits, owned or acquired from third parties, owned by the responsible party or co-responsible party, of a controlling or controlled legal entity, duly approved, to offset the principal debt, fine and interest, limited to 75% of its value.

The law comes into force 90 days after its publication.

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