Put Mariana Martins and Marcelo Blecher – 24/03/2020
Last week, Municipal Law No. 17,324/2020 was published in the Official Gazette, establishing the “dejudicialization policy” within the Municipality of São Paulo. Among other new features, it enables the Municipal Attorney General's Office to enter into tax debt settlement agreements with the aim of (i) reducing litigation; (ii) encouraging the appropriate resolution of disputes; (iii) promoting, whenever possible, the consensual resolution of conflicts; and (iv) improving the management of the volume of administrative and judicial demands.
The so-called “dejudicialization policy” will be coordinated by the Attorney General's Office of the Municipality of São Paulo, which, for regulatory purposes, must observe the principles of equality, tax capacity, transparency, morality, reasonable duration of proceedings and efficiency and, safeguarding information protected by confidentiality, the principle of publicity.
The tax transaction institute appears as a novelty in the legislation of the Municipality of São Paulo, which can be interpreted as an indication of a change in its collection policies, in line with the changes that the Federal Government has been making in recent months with the aim of achieving greater efficiency in collection, through the implementation of other alternative means for resolving disputes in tax matters, such as the federal tax transaction (MP 899/19, awaiting conversion into Law by the Federal Senate) and tax arbitration (subject of PL No. 4,257/2019, authored by Senator Antonio Anastasia).
In summary, there will be 3 (three) types of transaction in the Municipality of São Paulo, namely: (i) individual proposal or by joining the Attorney General's Office in the collection of active debt; (ii) joining in other cases of judicial or administrative tax litigation; and (iii) joining in low-value administrative tax litigation.
To formalize a proposal, the taxpayer must waive any current or future legal claims on which administrative proceedings, legal actions, including collective actions, or appeals are based, which have as their object the credits included in the transaction, by means of a specific request. Under the terms of art. 13, § 3 of the new Law, the transaction proposal accepted and approved by the Attorney General's Office constitutes an irrevocable and irrevocable confession of the credits covered by it, but, on the other hand, ensures the suspension of the enforceability of the tax credits transacted, which guarantees the taxpayer the regularity of their respective negative certificate of municipal taxes (“CND”).
Regardless of the modality, the transaction may be terminated by the Public Administration, if its conditions and commitments assumed by the taxpayer are not complied with, or if the practice of acts tending to empty assets is found, and the termination will imply the withdrawal of the benefits granted, the full collection of debts, deducting the amounts paid and will authorize the Public Treasury to request the conversion of the judicial recovery into bankruptcy or to file a bankruptcy action, as the case may be.
An act by the Attorney General's Office of the Municipality of São Paulo will regulate the conditions and procedures for the transaction of municipal debts, which will be disclosed as soon as a normative act is issued by the Municipal Tax Authority.
The tax team at Mazzucco & Mello Advogados is available to assist your company in formalizing the transaction agreement with the Municipality of São Paulo, in any of the modalities provided.