New ISS Law provides provides for a transition rule for the sharing of the tax amongst Municipalities

On September 24, 2020, it was published on the Official Journal (DOU) the Law No. 175/2020, effective as of the date of publication, which provides for rules for the rules regarding the Municipal Service Tax (ISS) payment to both the Municipality of the provider establishment and the Municipality of residence of the borrower, regarding health plan services, medical-veterinary care and assistance plans, fund administration, consortiums, credit and debit cards and leasing.

The split payment will be gradually reduced, so that, as of 2023, 100% of the ISS paid will belong to the Municipality where the borrower of the services is domiciled. The project seeks to fix the rules brought by Law No. 157/2016, which, despite bringing similar provisions on the place of tax collection on these services, had its effects suspended by the Supreme Court in March 2018.

In addition, the Law project provides for an electronic system of unified standard for the collection of ISS according to the guidelines of the newly created Management Committee of ISS Accessory Obligations (CGOA), a department created to regulate the application of the national standard of ancillary obligation.

Taxpayers must grant municipal and district tax authorities access to the system so they can provide information about rates, applicable legislation to the services rendered and banking domicile information for receiving the tax.

We will be pleased to discuss any questions you may have.