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Print articleService Tax (ISS) on Activities of Health Plan, Fund Management and Leasing will be Shared Between the Municipalities of the Service Provider and the Client
September, 2020 - Filipe Richter
Complementary Law No. 175/2020, enacted in September 23, 2020, determined that the Service Tax (ISS) must be shared between the municipalities where the service providers and the clients are located. Such rule is applicable to the following activities:
- health insurance plans;
- veterinary medical plans;
- administration of any funds, consortium, credit or debit card;
- easing of any asset.
The payment of the ISS to the municipality where the client is was challenged before the Brazilian Supreme Court in the past, mainly because the law had never defined clearly where the service taker was.
For this reason, the Complementary Law aims at defining where is the location of the destination of the service on the abovementioned activities.
The new Law sets a transition rule: until the year of 2023, ISS will be shared between the municipality where the service providers and the clients are located. As of 2023, the entire ISS will be paid to the municipality where the clients are headed.
To provide tax certainty, a Management Committee for Accessory Obligations (CGOA) will be created in order to define a layout of tax return and other ancillary obligations to be observed by taxpayers.
We are at your disposal if you have any questions regarding this matter.
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