On 05/08/2014, Rio de Janeiro State Decree No. 44.780/2014 was published in the Official Gazette. It regulates the CONFAZ ICMS Convention No. 128/2013, which authorizes the State of Rio de Janeiro to implement a Tax Amnesty Program to waive or reduce penalties and interest related to the ICMS debts due by December, 31st 2013.

Initially, the Decree established that the taxpayer shall apply to the program from July, 1st 2014 to September, 30th 2014 (for payments in cash or in installments) or from August, 1st 2014 to September, 30th 2014 (for payments with ICMS credits).

The payments shall be made in cash or in up to 120 monthly installments. For payments in cash the program establishes the reduction of 75% of the fines and 60% of the interest. For payments in installments the reduction established is  50% of the fines and 40% of the interest. The minimum value per installment is of 450 (four hundred and fifty) UFIR-RJ (Fiscal Reference Unit), for corporations, and 65 (sixty five) UFIR-RJ, for individuals.

The Decree allowed the taxpayers to pay the ICMS debts that have already been assessed by Tax Authorities and those spontaneously confessed. The debts already charged by tax authorities through tax assessments or assessment notes can only be paid in full (the taxpayer is not allowed to pay only part of the debt).

Furthermore, the payment of debts using judicial deposits is forbidden. If the taxpayer decides to pay a debt that is guaranteed in an escrow account, the amount deposited may only be withdrawn after the integral payment of the debt under the program.

Finally, the Decree authorized the use of accrued ICMS tax credits for the payment of 50% of ICMS debts covered by the program. In this case, the taxpayer will be subjected to an audit procedure by the Tax Authorities in order to confirm the ICMS credits.

As usual, subscription to the program is conditioned to the recognition of the debt and renunciation of any administrative or judicial discussion on the matter.

We remain at your entire disposal to provide any clarification that might be required.

For more information regarding this Legal Update, please contact Ivan Tauil, Roberta P. Caneca, Carolina Bottino or Pedro Lameirão.