The Brazilian Treasury Policy Council (CONFAZ) executed ICMS Agreement ICMS no. 108/2012 allowing the State of São Paulo to implement an Installment Payment Program for overdue ICMS. The Program is expected to include tax debts that fell due up to July 31, 2012.

The Program is to contemplate a discount of up to 75% in tax fines and 60% in other lawful surcharges (if the debts are paid in one single installment) or 40% in tax fines and 50% in other surcharges (in case of payment in up to 120 installments). The Program is also to contemplate the following interest rates: 0.64% per month (for payment in up to 24 installments), 0.80% per month (between 25 and 60 installments) and 1% per month (between 61 and 120 installments).

The Program is expected to include promptly enforceable debts, including debts in relation to which the State has already commenced the appropriate collection proceedings.

Registration with the Program does result in admission of the debt. The provisions of the Agreement do not apply to installments that were being regularly paid as of May 31, 2012, under the program established by ICMS Agreement no. 51/2007.

For more information, please contact Roberta Caneca and Marcos Muniz.