On November, 25, 2016 Decree No. 45.810 was published again in the Official Gazette of the State of Rio de Janeiro, originally from November, 3, 2016, which regulates Law No. 7.428/2016, regarding the State Fund of Fiscal Balance – FEEF.

The aforementioned decree states that  deposits to FEEF will be made monthly,by establishment, in the period from December, 1, 2016 to July, 31, 2018, the first payment being due on January, 31, 2017.

Additionally, the Decree contains:

a) indication of the tax benefits and incentives included in the FEEF deposits, and those that are  excluded;
b) the indication of the tax responsible for the deposit (payment);
c) the way the FEEF deposit should be determined;
d)  consequences related to  lack of compliance with the FEEF deposits; and
e)  ancillary obligations and bookkeeping related to FEEF deposits.

It is important to highlight that the Decree also extends the deadline for  tax benefits and incentives, for which the payment to the FEEF is mandatory, such as:

a) when the tax benefit or incentive is granted for a certain term, the deadline is extended for one month every ten months that the deposit is effective or a fraction;
b) when the tax benefit or incentive is granted for an non-definitive term, the maintenance of the benefit is guaranteed, with no reductions, until October, 31, 2018.

We believe there are many good arguments surrounding the legality and constitutionality of this Decree. For more information regarding this legal update, please contact TaxpartnersTC@mayerbrown.com.