The government of the State of Rio Grande do Sul has opened the opportunity to settle VAT debts in the state, with reduced interest and fines1, by means of Decree No. 54,346, dated as of 11/22/2018 (Decree No. 54,346/2018), published in the State Register on that same date.

The program is called "REFAZ 2018" and the main reductions provided are the following2:

In addition, we list below a few more comments on the program rules:

(i) 12/26/2018 is the deadline to join and to pay the single installment or make the first payment;

(ii) debts that have been assessed or not, registered as an overdue tax liability or not, including object of tax foreclosure, due by 04/30/2018, may be settled;

(iii) debts included in a previous debt payment plan may be again included;

(iv) the formalization of the request to use REFAZ rules causes debt admission − the request is conditioned on having court and administrative proceedings withdrawn;

(v) after the first installment has been paid, the following are due and payable on the 25th day of the following months. If on the date in question banks are not open normally, payment may be made on the following business day;

(vi) if the program is revoked by the taxpayer, the remaining amount will be due without the reductions provided in Decree No. 54,346/2018;

(vii) interest for late payment will be equivalent to the rate of the Special System for Settlement and Custody (SELIC) for federal bonds, accumulated monthly, charged on the amount that comes to be in the program.

Additional details about REFAZ may be found in Decree No. 54,346/2018 and on the State Revenue Department's website.

  Footnotes

1   This matter is also regulated by Instruction 55, dated as of 11.29.2018, of the State Revenue Services.

2   If the debts are to be paid in more than 1 installment, the reduction percentage applied to penalties in the payment of the first installment will be the same as provided for payment in one single installment, according to the period included in the program and the category of the company.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.