Through law 17.719/2021 the tax legislation of the municipality of São Paulo has undergone several changes.
Law 17,719/2021 was published on November 27, 2021, as a result of Bill No. 685/2021.
Among other things, the law makes it optional for service providers located outside the municipality of São Paulo to register with COPOM, invalidates ISS withholding rules when the provider is not registered, among other posts related to the issue:
- CPOM
- ISS
- IPTU
- ITBI
- TAX TRANSACTION
- TAX INCENTIVE PROGRAM
ARTICLE: CPOM - What it is and how the changes defined by the Supreme Court could affect your company
From the outset, we must consider that the changes have been significant, and most of them positive!
Likewise, these changes must be respected from 2022and are only valid for the municipality of São Paulo!
To keep you up to date with the new requirements, We'll explain the points to watch out for below:
CPOM - Register of Companies Outside the Municipality
Referring to Company Registration from outside the municipality, the changes are therefore very positive.
The law reconsidered the obligation set by the STF that companies should have active registrations, and made it optional for service providers established in other municipalities to register.
In addition, the law also annulled the requirement of tax withholding by companies/service providers in the city of São Paulo.
On the other hand, it is stricter in the application of penalties related to invoices, in the event of non-issuance or incorrect issuance by the service provider or intermediary, if knowledge of the tax changes is proven.
ISS - Service Tax
Regarding the Special Regime for ISS Payment applicable to Uni professional societies, in order to demand tax, the fixed calculation basis was transformed into progressive bands of monthly gross revenue.
There have also been changes in relation to the services described in items 10.05 and 17.11 of law 13.701/2003, such as rentals, property management carried out via a digital platform, passenger transportation or delivery carried out via a digital platform, so in these cases the ISS has been reduced from 5% to 2%.
There was also a reduction for the services described in items 10.04, 23.01, 13.01, 13.02, 13.03 and 17.07 as:
-Agency;
- Brokerage or intermediation of franchise contracts;
- Programming/visual communication;
- Phonography;
- Photo;
- Cinematography;
- Reprographics;
- Digitization;
- Franchise.
Article 1 of the law was also amended, excluding the auction from the ISS exemption, but keeping self-employed professionals exempt.
IPTU - Urban Property Tax
The law updated the Generic Value Plan, defining discount bands for the IPTU tax base on properties worth up to R$345,000.00, thus exempting taxes on properties worth less than R$120,000.00, and residential properties worth between R$120,000.00 and R$230,000.00.
Other changes related to the IPTU include:
-Reduction of fines: The 3rd and 6th articles still deal with fines for committing an intentional act, reducing fine amounts in cases of:
- 50% fine reduction if paid on time;
- 25% fine reduction in the event of payment during the course of the analysis.
-Payment exemption: Upon proof of income, among other stipulations, retirees and pensioners can have their IPTU exempted.
The new rules are limited to one property per taxpayer and in the same way will be in force from 24/02/2022.
ITBI - Property Transfer Tax
With regard to Transition Taxes on Goods and Real Estate, the changes occurred in terms of inclusion.
Inclusion of taxpayers in cases of establishment, termination or assignment of surface rights.
Similarly, the tax rate was increased to 0.5% for financing of up to R$600,00.00 for property transfers under the SFH, Par and HIS.
Tax Transaction
The changes to the Tax Legislation also defined the extinction of tax credits levied on non-profit religious and educational entities, authorizing the Municipal Attorney General's Office to regulate the procedures relating to discounts on fines and interest.
Tax Incentive Program
The law also changes some aspects of tax incentive programs for service providers in the East Zone, thus allowing new types of services to join, such as:
- Landscaping;
- Tour guide;
- Amusement parks, leisure centers;
- Recruitment and selection services;
- Party decoration and catering services;
- Technical services in buildings such as electronics, mechanics, among others.
In this sense, it is clear that several of these changes were made to favor companies/businesses affected by the Covid-19 pandemic, thus favoring the state's economic recovery.
The new rules should then come into force from 01/01/2022 - except those related to the IPTU, which will come into force from February, 90 days after the changes are published.
Therefore, the time to understand and adapt processes to the changes in Tax Legislation, inform clients and plan is acceptable!
Do you have any questions about the changes to the Tax Legislation? Contact contact us!
