A small company recently obtained a judicial decision, in the State Court of Tax Issues of São Paulo, that exceptionally authorized the payment deferral of  taxes and installments of State taxes overdue between March 1st and May 1st, 2020, due to the pandemic of Covid 19.

This is an important decision in favor of taxpayers as it demonstrates, in at a State level, the applicability of the understanding already handed down at the federal level, in which companies have been obtaining judicial decisions to suspend the payment of federal taxes.

The main argument analyzed in the case, accepted on a preliminary injunction by the lower court is that the measures to restrict circulation and social distance to contain the advance of Covid 19 are jeopardizing the maintenance of its activities, and may take several micro and small companies to bankruptcy, causing an increase in unemployment and an even greater retraction in economic activity.

This decision recognizes the necessity of, exceptionally, allowing the company to have financial breathing not to interrupt its activities, avoiding dismissals and its social economic consequences, also mentioning that the existence of a favored treatment of small and micro companies is provided for in the Federal Constitution (article 170).

Under the scenario experienced today by the country, the high Brazilian tax burden, and the judicial and administrative decision in the sense of the need for extraordinary measures in view of the situation currently experienced, we understand that it is appropriate to introduce precautionary measures in order to obtain the taxes’ deferral payments, during the period in which the restrictions mentioned are in effect.

Our team is available to assist in this and other tax law issues. For further information please contact our Tax Team by the following e-mails: rmarques@zaslaw.com.br or zaslaw@zaslaw.com.br.