The municipality of Macaé in the Brazilian state of Rio de Janeiro has enacted Supplementary Law No. 287/2019, establishing the city’s Municipal Refinancing Program ("REFIM"). REFIM incentivizes the payment of tax and non-tax credits, whether enrolled or not as overdue municipal liabilities, related to IPTU/TSP (Public Services Fees), ISS and other fees administered by the Municipal Revenue Service.
Pursuant to SEMFAZ Resolution No. 16/2019, the final term to adhere to REFIM is April 29, 2020, and credits whose taxable events occurred on or before December 31, 2019, can be included in this amnesty program.
Credits that are being disputed or are currently included in installment or re-installment programs may also be included in REFIM. However, if the taxpayer chooses to join REFIM with credits that are under judicial or administrative discussion, the taxpayer must withdraw from any processes involving these credits, waiving the rights under which they are based. This withdrawal must be reflected in the case docket of the judicial or administrative process.
REFIM provides for payment in a lump sum or in installments. Depending on the amount to be settled, the credit may be paid in up to 120 installments. With a lump-sum payment, amounts related to adjustment for inflation will be reduced by 50%. In both types of payment plans, interest and late payment fines will be reduced by 90%.
Finally, it should be noted that the taxpayer can offset the principal amount of the credit with credits due before December /31, 2018 that are net, certain and not expired.
For more information about the topics raised in this Legal Update, please contact our Tax team: TaxPartnersTC@mayerbrown.com.