The States of Rio de Janeiro and São Paulo as well as the capital of the State of Rio de Janeiro have issued rules concerning the payment in installments of tax debts.

The tax debt payment in installments in the State of Rio de Janeiro is provided in Decree n. 44.007/2012. Such provision does not contemplate the deduction of fine and interest amounts. Additionally, the rule ensures that the ICMS debts be paid in up to 60 installments. The non-tax debts and the Tax on Causa Mortis Transmission and as Donation of any Property and Rights (Imposto sobre Doação de Quaisquer Bens e Direitos ITCMD) may be divided in up to 24 installments.

With respect to the payment in installments of tax debts in the State of São Paulo, Decree n. 58.811/2012 expressly determines that the taxpayers who pay the ICMS in a lump sum will enjoy a 75% deduction over the fines and 60% over interest. Also with respect to the fines and interest, for those who choose the payment in up to 120 months, the deductions will be of 50% and 40%, respectively.

Note that the time limit to adhere is from March 1st to May 31st of 2013 and the ICMS debts originating until July 31st, 2012, may be paid in installments.

With respect to the payment in installments of the tax debts in the City of Rio de Janeiro, governed by Law n. 5.546/2012, the payment in installments is still pending regulation. The program includes debts related to the ISS, IPTU and Household Garbage Collection Fee.

Specifically with respect to this payment in installments, if the taxpayer chooses the payment in a lump sum, a 70% deduction of the fine and interest amounts will be ensured, and 50% for the payment in up to 84 installments.

Finally, it should be emphasized that the publication of the systems to pay taxes in installments at the end of the year is common practice because the State and City Administrations seek to obtain cash for the subsequent year.

(State Decree /RJ n.44007, Dec. 27.2012, State Decree /SP n. 58811, Dec. 27. 2012 and City Law /RJ n. 5546, Dec. 27.2012).