Effects of the Appeal No. 1.759.081/SP on the Taxation of Technical Services

the Conflict Between the Articles 7, 12, and 14 of the OECD Model Tax Conventions and Scope of “Independent Personal Services”

Abstract

This study aims to analyze the impacts of the Appeal No. 1.759.081/SP (“REsp No. 1.759.081/SP” or “Engecorps Case”), recently judged by the Superior Court of Justice (“STJ” or “Superior Court”), on the taxation of values sent abroad for payment of technical services for provided by a legal entity that does not have a permanent establishment in Brazil. It addresses the apparent conflict between the arts. 7th, 12th and 14th of the OECD Model Tax Convention on Income and Capital (“Conventions” or “Agreements”) in order to analyze the current treatment applied to values sent abroad for payment for technical services on the grounds of REsp No. 1.759.081/SP. In particular it analyzes the scope of application of Art. 14, with regards to individuals and their extension to legal entities, as well as from an objective perspective.