Leonardo Martins e Matheus Caldas Cruz

 

With the enactment of Complementary Law No. 189/2020, published on December 29, 2020, the State of Rio de Janeiro internalized ICMS Agreement No. 87/2020, entered into by the National Tax {Revenue} Policy Board (Confaz), to establish the Special Program for Installment Payment of Tax Debts of the State of Rio de Janeiro (PEP-ICMS) related to ICMS, IPVA, and ITD tax debts. The program establishes reduction of legal penalties and late payment chargers resulting from taxable events occurring up to August 31, 2020, whether or not they are registered as outstanding debt.

 

Complementary Law No. 189/2020 also internalizes ICMS Agreement No. 76/2020, which authorizes the State of Rio de Janeiro to grant amnesty for punitive fines for non-payment of installments of a debt refinancing program authorized by Confaz, which occurred between March 1, 2020, and July 30, 2020, in addition to reestablishing such installment payment programs and installment plans canceled due to default.

 

The enrollment to the PEP-ICMS will be conditioned on the prior approval of the request by the competent authority and will occur with the payment of the debt in cash or the first installment, depending on the installment option adopted by the taxpayer.

 

The maximum period for submitting an application for admission to the program will be 60 days, counting from the date of publication of the law. This period may be extended by an act of the Executive Branch only once and for a period not exceeding 60 days.

 

Among the conditions for enjoyment of the benefit, the law mandates that taxpayers waive any lawsuits and motions to stay tax enforcement, waiving the right on which they are founded, and any objections, defenses, and appeals filed in the administrative sphere involving the debt to be included in the program.

 

Absence of payment of more than two simultaneous installments (except the first one), existence of an installment or balance of an installment not paid for more than 90 days, default of the tax due for more than 60 days, or lack of proof of the withdrawal of any litigation involving the installment debt will cause cancelation of the program.

 

The benefits set out in ICMS Convention No. 87/2020 do not apply to taxpayers that have opted for the Special Unified Tax Collection Arrangement for Microenterprises and Small Companies (Simples Nacional), established by Complementary Law No. 123/06, nor to tax debts that have been subject to a judicial deposit in a lawsuit for which there is already a final decision in favor of the State of Rio de Janeiro.

 

The following table presents in detail the relationship between the number of installments and the proportion of the benefit granted:

 

Number of Installments*

Benefit

Single installment

90% reduction in legal penalties and late payment surcharges.

Up to 6 monthly and successive installments

80% reduction in legal penalties and late payment surcharges.

Up to 12 monthly and successive installments

70% reduction in legal penalties and late payment surcharges.

Up to 24 monthly and successive installments

60% reduction in legal penalties and late payment surcharges.

Up to 36 monthly and successive installments

50% reduction in legal penalties and late payment surcharges.

Up to 48 monthly and successive installments

40% reduction in legal penalties and late payment surcharges.

Up to 60 monthly and successive installments

30% reduction in legal penalties and late payment surcharges.

* The installments will be adjusted for inflation per the Selic Rate.

** The installments will have the minimum value equivalent to 450 Reference Tax Units of the State of Rio de Janeiro (Ufir RJ)

 

Machado Meyer is available to advise on the subject.