Tax Treaty Case Law around the Globe 2013

S. 103 Brazil: Technical services and the application of article 7 under Brazilian treaty practice – A case study

Luís Eduardo Schoueri/Mateus Calicchio Barbosa

1. S. 105 Introduction

The application of tax treaties remains seldom dealt with by Brazilian courts. Since the latter are not yet familiar with the interpretation of tax treaties as outlined by international practice, whenever judges are required to face the provisions of a treaty of this kind, the result is not always consistent with international standards. Suffice it to say that relevant documents such as the Vienna Convention on the Law of Treaties and the works of the Organisation for Economic Co-operation and Development (OECD) and the United Nations (UN) (e.g. Commentaries, Guidelines and Reports) are simply not taken into account.

After isolated decisions, cases involving the interpretation of a tax treaty are beginning to reach the courts which are still, to a great extent, unaware of the structure and rationale which is characteristic of treaties of this sort. To the extent that Brazilian judges, as a rule, do not seem prepared to rely on materials such as the OECD or UN Commentaries, and that the scholarly writings on the sub...