12/23/2021
On 27 November, it was published the Law n. 17.719/2021 that changes the tax system of São Paulo city. In this way, we highlight some important points brought by the Law.
- The rate of the municipal services tax (ISS) was reduced to 2% to several sub-items of the service list in art. 1 of Law n. 13.701/2003. The sub-items are 10.05 and 17.11 (related, respectively, to intermediation, via a digital platform, of rents, passenger transportation or deliveries, as well as the purchase and sale of goods and other tangible movable property (marketplace), and real estate management carried out via digital platform); 10. 04 (related to agency, brokerage or intermediation of franchise contracts (franchising); 23.01 (related to visual programming, visual communication and similar); 13.01, 13.02 and 13.03 (concerning phonography and photography), except when provided by notaries, registrars or their agents) and 17.07 (franchising).
- The fiscal register with the Registration of Companies from Outside the Municipality (CPOM) in the Municipality of São Paulo becomes facultative, for the service provider located in another municipality or the Federal District. This measure follows the Federal Supreme Court precedent (STF), which determines that registration must not be mandatory.
- The tax base of municipal tax services regarding single-activity companies (which are those that provide personal and individualized services, such as engineers, architects, etc.) also has been changed. Now, the taxation will be gradually increased with the gross revenue and the numbers of partners of the company.
- It was revoked the ISS exemption for liberal and self-employed professionals, who are registered as individuals in the Taxpayers’ Roll and who provide auction and similar services.
- The unit values per square meter indicated in the “Planta Genérica de Valores” – PGV, were updated for IPTU calculation purposes.
- In the building construction sector, the Law determine that the service provider must declare property data for tax purposes direct to the Municipal Finance Secretary of São Paulo. In addition, other accessory obligations were established.
- It was established infractions related to the Tax Declaration of Construction Completion (DCTO), with a fine equivalent to 50% of the value of the Tax on Services of Any Nature – ISS due, and 100% the holder of ownership, useful domain or possession of the real estate where the work was carried out, who submits inaccurate information with the aim of obtaining a reduction in the tax calculation base by means of adulteration or fraud.
- The Law made possible installments of nonprofit organizations, with 70% discount on fines and interest.
- The Contribution to Fund Public Lighting Service incidence rate will be readjusted annually in order to reflect the readjustments and revisions suffered by the electricity tariff and the tariff flags.
- The Municipal Law also has changed the tax installment payment program (PPI) and the tax program to regularize municipal services tax (ISS), in connection with the transfer of remaining tax debts from an installment still in progress.
Our tax team is available to provide further information and guidance on these and other topics.
