Consultation Solution n. 20/2022 of the Secretary of Finances of São Paulo

an Analysis of the Positioning of the Municipalities Regarding the Incidence of the ISS on Succumbential Fees

Abstract

This scientific article aims to discuss the position of the Municipalities regarding the incidence of the Tax on Services of Any Nature (“ISSQN” or simply “ISS”) on succumbential fees, the analysis of the jurisprudence and the possible the consequences that the positioning of the Municipal Treasury may bring to taxpayers, their legal protection and economic planning. Although the ISS only incidences on “provided services”, the Municipality of São Paulo, in the Consultation Solution n. 20/2022, provides that an Electronic Invoice for the succumbential fees is required. Alongside this position, it was also clarified that the issuance of the NFS-e must occur at the time of the final decision of the process – as soon as the process is settled – In the name of the client, even if the client was the winner part of the demand. In contrast to the Tax Authorities’ position, the offices argue that such taxation is unconstitutional, since the succumbent fees: (i) are not on the attached list of services of Complementary Law n. 116/2003; (ii) have a compensatory nature to the lawyer and punitive nature to the losing part, with no service provided to the last one. It should be noted that this position of the Municipal Tax Authorities was also adopted by other Municipalities in the Brazilian territory, which opens the door for law firms to file administrative proceedings and lawsuits questioning the nature of succumbential fees, taxation, application of fines and equality with the offices that collect the fixed ISS.