São Paulo City Hall - ex officio offsetting tax credits

The main provision of the law is that there shall only be refunding after checking the absence of tax debts entitled to the taxable person. In other words, if there are tax debts, the credit to be refunded shall be used in discharge of these pending.

Ex officio Offsetting

This should be an ex officio offset and should not allow the taxpayer to choose which debts to offset. When the credit to be refunded is less than the taxpayer’s debt amount, the Treasury should charge for the remaining balance. If the debit to be offset is less than the credit, the existing balance shall be refunded to the taxpayer.

Covered debits

The law allows the offset covers debts from taxes administered by the Municipal Treasury Secretariat, in installments or not, except those enrolled in Active Debt and subject to challenge by the taxpayer before the final judgment of their administrative or judicial decision. The debts to be offset must cover the original tax value and the penalty, as well as inflation adjustment and default interest.

Important: the offsetting treated in Law No. 16,670/2017 does not apply to taxes under the Unified Special Regime for Collection of Taxes and Contributions payable by Micro and Small Companies - Simples Nacional.

Deadline for the taxpayer manifestation

After determining the ex officio offsetting amount, the Tax Administration shall notify the taxpayers, who should have a thirty (30) days period from the notification to manifest themselves. If the taxpayer agrees or does not manifest even after the deadline, the offsetting shall be made and certified at refunding process.

In cases that the taxpayer disagrees, until the final decision or until the debt to be offset is settled the offsetting and refunding shall be suspended. The manifestation of disagreement deters the offsetting when the debt is installment or moratorium object, and the refunding request should be independently.

Duration

This Law has been in force since its publication, but with effects only after its regulation, as São Paulo City’s Executive has not issued it yet.