Leonardo Martins and Matheus Caldas Cruz
By means of State Law No. 9,041/20, published on October 5, the State of Rio de Janeiro authorized reduction of the ICMS tax basis on domestic operations with marine diesel fuel, to be consumed, moreover, by vessels intended for oil and natural gas exploration, extraction, or production activities. With the change, which internalizes ICMS Agreement No. 51/20, entered into by the National Finance Policy Board (Confaz), the tax collected will be equivalent to 4.5% of the value of the transaction.
The state law also provides for a reduction of up to 90% in interest and fines on overdue tax debts arising from levies or disallowances of tax credits for taxpayers performing the economic activities of oil and natural gas extraction and natural gas processing (CNAE codes 0600-0/01 and 3520-4/01) and manufacture of oil refining products (code 1921-7/00), whether or not entered or enrolled as outstanding debt, including those filed with respect to triggering events occurring up to September 30, 2020.
In order to enjoy special payment conditions, a Tax Conduct Consent Order (TACT) must be entered into, which will suspend enforceability of the tax debts covered and must be submitted by taxpayers opting in by December 7, 2020, in addition to complying with the other conditions that may be established by decree.
The debt may be settled in cash, within 15 days from the date of execution of the TACT, or in installments, with the first installment corresponding to at least 50% of the total value of the debt and the last payment made by December 15, 2020.
For cases in which there is ongoing litigation in the administrative or judicial sphere, the taxpayer must, by the date of execution of the TACT, expressly, irrevocably, and irreversibly formalize the waiver of the right on which objections, actions, or appeals relating to the tax debts covered are based. It is forbidden to use the amount of the judicial deposit for payment of the debt, since the guarantees presented in court can only be withdrawn after effective liquidation of the debt.
In the event of non-payment of the initial tranche, all debts must be demanded immediately. In the event of default for more than 30 days for any of the installments after the initial one, the benefits provided for will be immediately cancelled and the remaining balance will be calculated with the application of a fine and other legal accruals, less the installments paid.
The payments made with the reduction benefits provided for in Law No. 9,041/20 do not allow taxpayers to take advantage of any ICMS credits and also do not entail any ancillary obligations other than those expressly provided for in the law or in the TACT.
The discounts on default surcharges granted by the government of Rio de Janeiro are in line with initiatives taken by public revenue agencies with the purpose of raising cash and reducing their stocks of outstanding debt. For taxpayers, this movement represents an opportunity to reduce their tax exposure, using a significant financial discount, in a prolonged period of economic downturn.