In line with the objective of bringing the tax authorities and taxpayers closer together, reducing tax litigation through the use of alternative or appropriate methods, PGE Resolutions 4826 and 4827, of March 16, 2022, were published in the Official Gazette of the State of Rio de Janeiro, regulating, respectively, procedural case settlements (NJP) and the procedure for voluntary settlement of disputes involving the State Public Authorities.
Procedural Case Settlements (NJP) - PGE Resolution 4,826/22
PGE Resolution 4,826/22 seeks to improve the execution of procedural case settlements within the Rio de Janeiro State Prosecutor's Office. It repeals Resolution 4,324/19, expanding the possibilities for negotiation and establishes a more detailed set of rules for the state and taxpayers to enter into NJPs.
The main goal of NJPs continues to be reduction of litigation, efficiency in the collection of outstanding debt, and stimulus to tax compliance, but the instrument also honors the autonomy of the parties' will, procedural cooperation, legal security, and the financial capacity of taxpayers with outstanding debts before the State Attorney's Office of Rio de Janeiro.
According to the new rule, all debt, whether or not registered as collectible debt (except amortization plans, in which case the debt must be registered), whether or not brought in court, are potentially subject to an NJP.
Among the various possibilities for entering into an NJP brought in by article 10 of Resolution 4,826, those that were not yet regulated draw attention:
- amortization plan;
- acceptance, evaluation, substitution, release, or execution of guarantees, including prior to the filing of a tax foreclosure;
- fiduciary guarantee from the officers and directors and/or partners of the debtor legal entity or third parties;
- extraordinary concurrent standing among managing partners;
- execution means;
- definition of the receiver in the attachment of billings, company, or establishment;
- inclusion, continuation, or exclusion of the right in credit protection networks or protest of outstanding debt certificate, when applicable, or submission of these acts to term or condition;
- scheduling of the case;
- new modalities of procedural communication, including by e-mail or messaging applications; and
- installment payment of fees for loss of suit.
Resolution 4,826 contains specific chapters dealing with the amortization plan, the timing of the proceeding, and acceleration of collateral.
For the execution of an NJP involving an amortization plan, the resolution states that only debts equal to or greater than 500 thousand UFIR-RJ can be negotiated, to be paid off within a maximum period of 120 months, with the mandatory provision of collateral.
There is the possibility of including non-judicial debts in the amortization plan, as long as the taxpayer expressly agrees with the filing of the tax foreclosure and the corresponding legal charges.
Without considering the peculiarities of each case, the taxpayer's duties are, in general terms: irrevocable and irreversible confession of the debts included in the NJP; commitment to guarantee or pay in installments, within 30 days, all the debts that may be recorded as collectible debt after the execution of the NJP; and the taxpayer's commitment to keep good standing with the State Treasury Department.
An NJP that deals with the debt repayment plan may also suspend constrictive acts in the corresponding execution proceedings, but it does not suspend the enforceability of tax debts. The concession of a tax regularity certificate is conditioned on fulfillment of the requirements set forth in articles 205 and 206 of the CTN[1] and the offering of amortization plan clauses.
Scheduling of the case
Without further details on the subject, Resolution 4,826 only establishes that the parties may, by mutual agreement, establish a calendar for the performance of judicial procedural acts, pursuant to article 191 of the Code of Civil Procedure.[2]
To enter into an NJP aiming at scheduling, the PGE should consider, besides the provisions of articles 2 and 3 of Resolution 4,826,[3] the taxpayer's interest in reducing the costs spent with the maintenance of collateral, the impacts of the assumption of the burden provided for in article 191, paragraph 2, for administrative organization and the advantageousness arising from other provisions.
Acceleration of guarantee
Resolution 4826 also provides for the possibility of negotiation between the tax authorities and the taxpayer to offer a guarantee before the filing of a tax enforcement action or registration of the debt as outstanding.
In analyzing the guarantee offered, the PGE must consider the provisions of article 11 of Law 6,830/80 and article 835 of the Code of Civil Procedure, which establish the preferential order of attachment.
Voluntary settlement of disputes - PGE Resolution 4,827/22
PGE Resolution 4,827 regulates, within the State Attorney General's Office, the voluntary settlement procedure for disputes involving the State Public Administration and establishes measures for the reduction of administrative and judicial litigiousness.
With a very innovative text, the resolution presupposes the achievement of mutual benefits for those involved, obeying the constitutional principles (implicit and explicit) of legality, voluntariness, autonomy, verbal acknowledgement, good faith, cutting red tape, efficiency, and economy.
The definition of voluntary settlement is provided for in paragraph 3 of article 1 of the resolution as the “case in which the State presents a calculation memorandum, pursuant to article 509, paragraph 2, of the Code of Civil Procedure, and the creditor agrees to its terms in order to end the litigation, waiving any overpayment.”
Other interesting concepts addressed by the resolution are those of "negotiation" and "mediation". Negotiation is considered to be a "technique for solving disputes in or out of court, characterized by the search for voluntary settlement through direct dialogue between those involved, without any intervention by a third party as helper or facilitator.” The negotiation can be done in a preventive manner, as a way to avoid litigation that has not yet gone to court.
Mediation, in turn, is defined as a "consensual dispute resolution activity, in which the mediator, acting preferably in cases where there is a prior link between the parties, without decision-making power, will assist and encourage the interested parties to identify or develop, by themselves, consensual solutions to the dispute.
The resolution also provides for the possibility of reaching a court settlement, defined as any voluntary settlement signed when a lawsuit is in progress, at any procedural stage, including after the final and unappealable decision in the pre-trial phase, which can encompass the litigation in part or in full.
The execution of the terms of voluntary settlement with the objective of preventing or closing disputes will observe, among other criteria established in article 4 of the resolution, the probability of success of the arguments made by the parties, the legal feasibility, and the cost-effectiveness of the settlement for the state.
The procedure for signing the instruments of voluntary settlement must follow the rules established in PGE Resolution 4,710/21, which created the Voluntary Settlement Center of the State Attorney General's Office - NAC/PGE.
[1] Article 205. The law may require that the proof of payment of a certain tax, when due, be made by means of a clearance certificate, issued upon request by the interested party, containing all the information necessary to identify his person, tax domicile, and branch of business or activity, and indicating the period to which the request refers.
Sole paragraph. The clearance certificate shall always be issued in the terms in which it was requested and shall be supplied within ten (10) days of the date the request is received at the office.
Article 206. The certificate stating the existence of debts not yet due, in the course of executive collection in which attachment has been performed, or whose enforceability is suspended, has the same effects as those provided for in the prior article.
[2] Article 191. By mutual agreement, the judge and the parties may set a calendar for the performance of procedural acts, when applicable.
Paragraph 1. The calendar binds the parties and the judge, and the deadlines stated therein shall only be modified in exceptional, duly justified cases.
Paragraph 2. Notification of the parties for the performance of a procedural act or the holding of a hearing whose dates have been designated in the calendar is dispensed with.
[3] Article 2. The execution of an NJP shall be oriented so as to promote:
I - reduction of litigiousness and less onerous collection instruments;
II - efficiency in the collection of outstanding debt;
III - stimulating tax compliance;
IV - the parties' autonomy of will;
V - procedural cooperation and legal security;
VI - adjustment of collection instruments to the financial capacity of the State's outstanding debt debt debtors;
VII - fair competition among debtors; and
VIII - publicity, impartiality, and public interest.
Article 3 - the execution of an NJP may be conditioned on a demonstration of interest of the public entity in the clauses of the deal, considering:
I - the economic and financial capacity of the debtor;
II - the debt profile;
III - the advantageousness to the Revenue Service, manifested, without prejudice to other cases, by means:
- Of the provision of a fixed term for settlement of debts;
- The offering of sufficient and liquid guarantees;
- Comparison with the time, costs, and prospect of success with the usual administrative and judicial collection strategies; and
- The prospect of the debtor's return to tax compliance including as to prior debts.
