Sao Paulo government reduces interests applicable to ICMS debts
Paulo Machado (Lawyer of Tax Law Team)
By Resolution No. 31/2012 of its State Office of Treasury, the state government of Sao Paulo has reduced the interest payable on debts and fines of ICMS (tax on distribution of goods and services), through changes in the criteria for calculation.
Before said resolution, the calculation was made with interests legally valid for discount of trade acceptance bills (“duplicatas”) fixed by the Brazilian Central Bank. The new system presented by Resolution No. 31/2012 sets forth that the interest must be calculated on the basis of average pre-fixed rate of credit operations with free resources benchmarks for interest rates – the purchase of goods, issued by the Brazilian Central Bank. Last year, with the old methodology, the accumulated interest rate was of 36.74%, whereas, based on the new methodology, the rate was of 16.72%.This new policy came into force on May 1st of this year.