SP recovers R$7.3 billion in ICMS and prepares agreement for IPVA – 04/23/2024 – Market

The Tarcísio de Freitas (Republican) government’s ICMS debt recovery program reached the R$7.3 billion mark this week. The amount already exceeds the revenue forecast of R$4.4 billion drawn up at the end of last year.

As companies can adhere to the negotiation notice until next Tuesday (30), the State Attorney’s Office states that the final numbers should be even more significant.

The balance of the program obtained by Sheet together with the PGE (Attorney General of the State of São Paulo) shows that R$413 million has already entered the state coffers.

The projected value for this year is now R$1.4 billion. It is double the target announced by the state government.

There are 5,237 accessions celebrated. Of these, 4,166 are agreements for payment within five years. The numbers have grown a lot in the last few days of membership, according to PGE.

The state attorney general, Inês Maria dos Santos Coimbra, told Sheet that the body is already working on two new tax transaction notices. One for small debts, which mainly targets IPVA debts of individuals who use cars and motorcycles as a work tool. The other targets companies undergoing judicial recovery (see more details below).

In relation to ICMS, the prosecutor’s office promoted meetings with businesspeople and tax experts to present the program, answer questions and listen to suggestions, with the aim of increasing adherence and also avoiding judicialization.

“We have done bold publicity work. Taxpayers may not join, but they have to know that [o programa] exists”, says the prosecutor.

“It’s a different way of looking at revenue. Less belligerent. Something that works for the State, works for the taxpayer and can be accommodated without harming the fiscal interest.”

The ICMS negotiation notice provides for a 100% discount on late payment interest and 50% on the remaining debt, including fines of any kind, interest and legal charges. As long as there is no reduction in the principal amount of tax due.

Payment can be made in 120 months, with a 5% down payment. Part of the debt can be paid with court orders and accumulated ICMS credits from own or third parties.

Only debts registered in the state’s active debt are negotiated.

For taxpayers who sign up in the second half of April, the first installment is due on May 15th. Only after this will PGE have a consolidated assessment of the initiative.

The state’s deputy attorney general for Tax Litigation, Danilo Barth Pires, states that there will be no extension of the deadline. To do this, it would be necessary to conclude a new authorization agreement with other states within the scope of Confaz (National Council for Financial Policy).

Tax lawyer Amanda Gazzaniga, from ButtiniMoraes, states that the method of using third-party ICMS credit represents an opportunity for taxpayers in terms of cash flow, as they can be negotiated at a discount between the parties.

“It is a considerably more accessible and effective alternative compared to the use of court orders, providing an opportunity for the company to take advantage of this type of tax settlement before the end of the program, as membership is conditional on the indication of credit”, says the lawyer .

IPVA debts

The ICMS negotiation program is part of the law sanctioned in November last year that created the Paulista Agreement. The legislation also modernized the rules on active debt collection.

Two new notices are already being prepared by PGE-SP within the program.

The first must cover active debt debts of up to R$42,432 (1,200 Ufesps), for individuals and legal entities in all state taxes. This is the floor for tax enforcement. The law allows you to include debts registered in active debt for at least two years.

The expectation is to attract mainly IPVA debtors, with the aim of regularizing the situation of those who depend on vehicles and motorcycles to work, such as delivery people and app drivers.

The state attorney general states that the revenue in this case should not be as significant as in the ICMS negotiation, but it contributes to the regularization of an important contingent of debtors.

“It’s almost like come and clear your name,” he says. “Among these taxpayers there are many people who depend on their vehicle to work and who are having difficulty generating income due to these debts.”

In the case of the notice for companies in judicial recovery, the installment payment is up to 145 months, there is no provision for down payment or requirement for guarantees.

Many of these companies signed tax transaction agreements with the Union, but continued to default on state taxes in the face of stricter limits for this negotiation.

“It’s a way to bring these companies into tax compliance and enable them to produce again”, says deputy attorney Danilo Barth Pires.

The São Paulo law mirrors the rules used by the federal government, which saw the recovery of active debt grow significantly with new legislation on the negotiation of this liability.

São Paulo’s active debt exceeds R$400 billion. Around 40% of the value is considered recoverable by the prosecutor’s office.

ICMS negotiation

What is it
Transaction for Adhesion in Relevant and Widespread Litigation Controversy regarding late payment interest levied on debts included in active debt

Conditions

• 100% discount on late payment interest
• 50% discount on the total remaining debt, including fines of any kind, interest and legal charges
• The application of the aforementioned discounts may not result in a reduction in the principal amount of tax due
• Installment in 120 months
• Use of accumulated ICMS credits, limited to 75% of the debt
• Use of court orders, limited to 75% of the debt

Deadlines

• 04/29/2024 (request)
• 04/30/2024 (adhesion)

Source: Law 17,843