The Legislative Assembly of São Paulo approved Bill of Law 57/2017, sent by Governor Geraldo Alckmin in February, which allows for the review of the penalties of fines and interest for the taxpayers of the Tax on the Circulation of Goods and Services (ICMS). The measure, published by the government last week (the 5th), will facilitate the regularization of the tax obligations of companies with debts and will allow them to continue their activities.
“Whoever confesses the debt may have it reduced to 35% of the amount owed in the principal fine and up to 50% in the ancillary fine. These rules apply both to the future and to the past, to the entire history of debts,” said the governor when the law was sent.
According to the government, this law creates a fairer model of sanctions for taxpayers with debts, establishing proportionality in the amounts of the fines and a model of “confession of debt” that will yield discounts upon settlement. This action is part of the set of measures of the Tax Compliance Program, which, according to the government, establishes a more rational logic in the relationship of the taxpayer with the São Paulo tax authorities.
Fine – Under the current rules, the fine for the non-collection of the ICMS (substantive fine) may reach 300% of the value of the tax, making the settlement of the debt difficult. As of now, the ceiling of the fine shall become 100% of the tax owed, favoring regularization and discouraging the recurrence of the taxpayer.
The substantive fine may further be reduced to 35% of the value of the ICMS owed should there be a confession of the infraction. In that case, the confession shall be irrevocable, unalterable, and the taxpayer must waive their administrative defense or appeal.
Incentive – All of the changes provided for in the Bill of Law shall have effect for future infractions. Even so, mindful of the demand of the companies that wish to regularize their situation with the tax authorities, the State government shall extend the benefits of the reduction of fines and interest to past debts.
To this end, a period shall be opened so that taxpayers with infraction notices pending regularization may carry out the confession of the debt, relinquish the tax dispute, and avail themselves of the benefits of the reduction of fines and interest upon the settlement of the debts.
The measure shall benefit more than 10 thousand taxpayers who today dispute, at the administrative level, before the Tax and Charges Court of the Department of Finance, debts that total R$ 110 billion – including the value of the tax, the fines, and the default interest.
See the full text of the proposal here.
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