Due to the lack of help from the São Paulo City Hall, which has so far not issued any rule extending the collection of municipal taxes, as a result of the crisis triggered by COVID-19, taxpayers have filed in court and obtained injunctions to extend the collection of municipal taxes.
The 15th Court of the Public Treasury of the City of São Paulo, when analyzing the injunction request of a taxpayer, extended the collection of ISS for a period of 90 days. The court understood the need for an extension of the tax, because the taxpayer is not carrying out its normal activities:
“(…) It is verified that the preponderant activity of the plaintiff was directly impacted by the Decrees of the State and the Municipality of São Paulo, being prevented from exercising its preponderant activity, which culminates in a drop in revenue and compromises the payments of salaries and taxes.
Even though the plaintiff is operating in secondary activities, its performance is reduced. However, the taxes levied on the payroll continue to be demanded, which demands the action of the Judiciary in an attempt to minimize the economic crisis reported in the records.
In light of the considerations exposed, analyzed in conjunction with article 170 of the Federal Constitution, which dictates the parameters for the exercise of economic activity and advocates the valuation of human labor, the protection of private activity, and full employment, the fumus boni iuris is present.
The periculum in mora is also configured, due to the imminence of the end of the term for ISS collection, associated with the fact that the state of public calamity is still in effect, which determined the suspension of various economic activities. (…)”.
Along the same lines, the 8th Public Treasury Court of São Paulo granted an injunction to postpone the collection of municipal taxes, as well as adhered installment plans.
Therefore, taxpayers have been obtaining favorable decisions to extend the collection of taxes in all spheres, which will certainly give some breathing space to companies to face this period.
Our Tax Team follows up on the orders of our clients and partners so that we can discuss the taking of measures, including extrajudicial ones, tending to preserve the maintenance of the business activities and mitigate some tax effects on them.
We remain at your disposal for any clarifications.
DDSA Tax Team