Tax transaction has been adopted at the federal level since 2020 and has already led to the signing of hundreds of agreements between the Tax Authority and taxpayers, all involving the granting of benefits to taxpayers (such as installment plans, discounts on fines and interest, and the use of tax losses and negative CSLL base). Mirroring this framework, the state of São Paulo enacted Law 17.843/2023, known as the “Paulista Agreement”, providing for the possibility of agreements between the State Tax Authority and taxpayers for tax regularization purposes.

This law was recently regulated by Resolution PGE No. 6, dated 6, February 2024 (by the State Attorney General’s Office), which outlines the principles and rules that will guide those tax transaction agreements made individually and by adherence.

Basically, the following benefits are provided for the individual transaction:

1. The granting of discounts on fines, interest, and legal increases (including attorney’s fees), related to credits to be transacted which are classified as irrecoverable or difficultly recovered. Those discounts are limited to 65% of the tax credit (70% for individuals, Microentrepreneurs, Small Businesses, and businesses in judicial recovery);
2. The offering of special terms and methods of payment, including deferral, installment plans, and moratorium (installment up to 120 months – 145 months for individuals, Microentrepreneurs, Small Businesses, and companies in judicial recovery);
3. The offering, replacement, or disposal of guarantees and constraints. To achieve this, any forms of guarantee provided by law may be accepted;
4. The use of accumulated credits and ICMS reimbursement, including in cases of tax substitution and credits from rural producers, owned or acquired from third parties, by the responsible or co-responsible party, by a controlling or controlled legal entity, duly approved, for compensation of the main debt, fine, and interest, limited to 75% of its value; and
5. The use of judicial precatories, own or from third parties, limited to 75% of the value of the transacted debt.

When classifying debts as irrecoverable or difficult to recover, Resolution PGE No. 6 will consider the taxpayer’s payment history, the existence of valid and liquid guarantees, and the number of suspended or installment debts.

A new Public Notice, PGE/TR No. 01/2024, introduces a special type of settlement for widespread legal disputes concerning ICMS debts. This allows the negotiation of such debts, registered as active and inclusive of late interest charges that exceeded the Selic rate, a situation initially brought on by Law No. 13.918/2009. While Law No. 16.497/2017 later capped these interest rates at the Selic level, this public notice specifically addresses outstanding debts incurred before this adjustment.
The notice offers a 100% discount on late interest and a 50% discount on the fine. The payment of the remaining balance can be made in cash or in up to 120 installments. Additionally, the notice allows the use of accumulated ICMS and rural producer credits, and court-ordered payments (your own or acquired from third parties).

Taxpayers can request the exceptional transaction until 29, April 2024. After the electronic request is approved, adherence can be made until 30, April 2024.