The taxation of income from technical services is a controversial topic. While many countries tax this income in accordance with Art 7 or Art 14 UN Model Convention (UN MC), some countries apply a wide understanding of the term “royalties” in Art 12 UN MC. Sometimes even Art 21 UN-MC is applied. The Committee of Experts on International Cooperation in Tax Matters (Committee on Taxation) has long been dealing with the question of how to tax technical services. It is now planning to include a new article on the taxation of fees for technical services in the next update of the UN MC in 2017. By giving the source country the right to retain a witholding tax that does not require any pysical presence in this country, the Committee on Taxation is trying to solve, inter alia, the tax challenges of the digital economy. Matthias Mitterlehner provides insight in the proposed new article of the UN MC and the potential implications on Austria’s taxing rights.