Through Decree 50.032/2021, the City of Rio de Janeiro established the requirements and conditions for the taxpayers to settle transaction resolutive of claim related to the collection of tax debts by the City Treasury, enrolled or not as an overdue tax.

The possibility of tax transactions at the Municipality of Rio de Janeiro was introduced by Law 7.000/2021, which changed several provisions of Law 691/1984 (Municipal Tax Code) and is regarded as small municipal tax reform. The transaction is a hypothesis of extinguishing tax debts, outlined in article 156, III of the National Tax Code. It consists of mutual concessions between the taxpayer and the treasury, aiming to regularize tax debts and stimulate the closing of tax disputes.

According to the Decree, the transaction can be individualized or by adhesion.

The individualized transaction can be proposed by the taxpayer, the Municipal Department of Finance and Planning (SMFP), or the City Attorney General’s Office (PGM). Excepted for some justified cases, such transaction modality will only be admitted in the hypotheses of: I – possible frustrated collection; II – difficulty on reverting judicial decision on the upper courts; III – legal entity debtor that had adjudication of bankruptcy or figures as part on judicial or extrajudicial recuperation, or extrajudicial liquidation; IV- need of isonomic treatment of taxpayers on the same factual or legal conditions; or V – facts that justify a potential revision of the tax debt.

The proposal of a transaction by adhesion will be published on official press and public entities websites, by a public edital that specifies, objectively, the factual and legal hypotheses in which SMFP or PGM proposes the transaction in the dispute. This transaction modality comprises dispute resolutions about the same matter, especially when linked to relevant and widespread legal controversy or initiatives aiming the streamlining, economic and efficiency in the taxes collection.

Under Law 7000/2021, the transaction may contemplate the following benefits: I- discounts on fines, default interest and legal charges related to debts to be transacted; II – special deadlines and payment methods, including deferrals and moratorium; III – offer, substitution or disposal of collaterals and judicial liens; IV- option of tax offsetting and payment in kind of immovable property. Among those benefits, the payment in kind of immovable property still awaits regulation.

Regarding the discounts, Decree 50.032/2021 provides:

  • 80% decrease on interest charges and fines, in case of cash payment;
  • 70% decrease on interest charges and fines, in case of payment in 6 installments;
  • 60% decrease on interest charges and fines, in case of payment in 12 installments;
  • 50% decrease on interest charges and fines, in case of payment in 18 installments;
  • 40% decrease on interest charges and fines, in case of payment in 24 installments;
  • 25% decrease on interest charges and fines, in case of payment in 48 installments.

The modalities of tax transaction do not apply to debts: I- due under the simplified tax system regime (Simples Nacional); II – included in Concilia Rio Program; III- benefited by Law 6.625/2019, which establishes remission and amnesty of tax debts related to public notary services; IV- the object of other alternative or adequate means of conflict resolution foreseen in the legislation.

Fraga, Bekierman & Cristiano Advogados‘ tax team is available to clarify any doubts on the matter.