By Patricia Fabris

The amounts charged by the State of São Paulo are much higher than what is constitutionally acceptable when it comes to monetary correction.

In view of this, a company filed a lawsuit after joining the PEP – State Tax Installment Program in the State of São Paulo, requesting a reduction in the amount based on a review of the amounts confessed by the Plaintiff herself, under the allegations that:

1. the interest on arrears applied to the tax due was unconstitutional, since it was above the SELIC interest, and that such interest had already been declared unconstitutional in the Argument of Unconstitutionality No. 0170909-61.2012.8.26.0000 judged by the Egrégio Tribunal of the state of São Paulo;
2. Considering that the fine applied is greater than the principal amount, the Supreme Federal Court has already declared the fine unconstitutional when it is confiscatory – that is, greater than the principal amount.

Thus, the company managed to reduce more than 50% of the installment amount, by achieving, preliminarily, in the following terms:

 “[…} Ab initio, it is important to highlight that joining an installment program does not prevent legal discussion on possible defects in the collection:

Summary: ICMS TAXES – Default interest – State Law No. 13,198/09 – Unconstitutionality – Incidence – Impossibility: – Adherence to the installment payment program does not prevent access to the jurisdiction for the purpose of understanding legal issues, including those provided for by law. – The member state may not set an interest rate on tax matters that exceeds that established by the Union for federal taxes.. (TJSP. 10th Public Law Chamber. Rapporteur Teresa Ramos Marques. Appeal No. 1024985.95.2016. Judgment Date 08/14/2017)

The limitation of the interest rate to the ceiling of the amount charged by the Union in federal taxes does not require further comment, since it has been the subject of pacification by the Honorable Special Body of the TJSP, in the following terms:

 Summary: Appeal – annulment action – tax debt subject to installment payment (PEP) – possibility of reviewing the agreement to eliminate interest that is not in accordance with the law – allegation of unconstitutionality of the interest established by State Law No. 13,918/09 – issue already decided in the Argument of Unconstitutionality – interest percentage cannot be higher than that established by the Union – due to the recalculation of the outstanding balance – judgment reformed Appeal granted. (TJSP. 12th Public Law Chamber. Rapporteur Souza Nery. Judgment Date 1027235.04.2016. Judgment Date 08/18/2017)

The Supreme Federal Court limits the level of sanctioning fines to one hundred percent of the principal amount of the debt; an understanding that guides the actions of the São Paulo Court of Justice:

Summary: Appeal against a decision that, in tax enforcement proceedings, accepted the pre-enforcement exception to recognize the unconstitutionality of the application of the interest rate stipulated by State Law No. 6,374/89 and determined that the Claimant recalculate the interest using the SELIC rate, within 10 days – Late payment fine limited to 20% and punitive fine limited to 100%, in accordance with the understanding of the STF – Review of interest – Possibility – The Honorable Special Body, giving an interpretation in accordance with the Constitution to Law No. 13,918/2009, and in agreement with the judgment in ADI No. 442, recognized that the interest rate applicable to the tax debt or fine cannot exceed the rate applicable to the collection of federal taxes, in this case, the Selic rate – Precedents TJSP and STF – Suspension of the enforceability of the credit admitted – Decision reformed – Appeal granted. (TJSP. 3rd Public Law Chamber. Rapporteur Marrey Uint. Instrument Appeal No. 2018831.72.2017. Judgment Date 08/15/2017) GN

In view of the aforementioned decision and comments, we highlight the legal possibility of recovering/questioning the amounts applied by the State of São Paulo as correction of state debts.

The MAZZUCO & MELLO law firm is available to all taxpayers who have already had debts with the State of São Paulo or have debts in order to protect their rights and significantly reduce the amount charged, considering that the correction aspect applied is unconstitutional and confiscatory.