The State of São Paulo approved Law No. 17,847/2023, which establishes the requirements and conditions for the execution of a transaction by the State Government, autonomous agencies and other state entities that are represented by the State Attorney General’s Office (“PGE”), for the settlement of debts registered in the Active Debt.
The transaction can be carried out in two ways:
Adherence to terms and conditions established in a notice published by the PGE; or
By individual or joint proposal, initiated by the debtor or creditor.
For the purposes of the transaction created herein, the granting of discounts on fines, interest, and other legal additions to debtors in “systematic default” on the payment of ICMS, as defined by an act of the PGE, will be prohibited.
Transactions will also not be permitted in relation to debts fully guaranteed by deposits, insurance guarantees or bank guarantees, in relation to which there is a final and binding decision favorable to the State of São Paulo.
The law provides for 3 different types of transactions:
– Transaction in the collection of credits from the State, its autonomous agencies and other state entities;
– Transaction by adhesion in tax litigation of relevant and widespread legal controversy; and
– Transaction by adhesion in small value litigation.
It is generally up to companies to analyze the viability of continuing or not discussing active debts, given the possibilities of transaction.
