Brazil Issues Clarification on Taxation of Technical Service and Assistance Fees

On 20 June 2014, Brazil issued Interpretative Declaratory Act No. 5/2014, which clarifies the tax treatment of technical service and technical assistance fees paid from a Brazilian resident to a party resident in a jurisdiction with which Brazil has a tax treaty.

When such technical service or assistance fees are paid, the provisions of the tax treaty will apply in the following manner whether transfer of technology has taken place or not:

• When the relevant treaty or protocol treats techni…