Flávio Sussumu Pizão Yoshida
On November 10, 2016, the Government of the City of São Paulo (local acronym PMSP) published Normative Opinion SF No. 4/2016 (“PN 4/2016”), which established a new position regarding the application of the rule that provides for the non-levy of the ISS tax on services exports.
According to the sole paragraph of section 2 of Supplementary Law No. 116/2003, the non-levy does not apply to services whose results are verified in Brazil. However, the legislation does not provide objective criteria for determining what should be considered the ‘result’ of the service.
In April of this year, the government of the city of São Paulo had issued Normative Opinion SF No. 2/2016 – now repealed -, according to which the word ‘result’ would mean the performance of the activity itself, so that the result of a service was to be verified in Brazil unless it was personally carried out abroad. In this regard, according to Normative Opinion SF No. 2/2016, the place of enjoyment of the benefits of the service was irrelevant.
Normative Opinion No. 4/2016 adopts a new position on the subject. It says that service export occurs whenever the person, the material or immaterial element or the economic interest of the service provision is located abroad. This position is, therefore, more comprehensive and beneficial for taxpayers.
On the other hand, Normative Opinion No. 4/2016 places on the taxpayer the burden of presenting documentary evidence of compliance with the requirements for the application of the rule of non-levy of the ISS. It also brings a list of situations in which it expressly excludes the characterization of a service export, such as: (i) computer and similar services, if the computer system, database or equipment is linked to a person located in Brazil (item 1 of the List of Services); (ii) research and development services of any kind, if the researched base is located in the Brazilian territory (item 2 of the List of Services); (iii) intermediation and similar services, and technical, administrative, legal, accounting and commercial support and similar services, if one of the parties being intermediated, the respective assets or the economic interests are located in Brazil (items 10 and 17 of the List of Services); and (iv) services of management of any funds, consortiums, credit or debit cards, customer portfolio, postdated checks and the like, if there is any investment or acquisition in the domestic market (item 15.01 of the List of Services).
In our opinion, taxpayers can challenge the prohibition on the application of the non-levy of the tax in the cases above, because we find that the results of these services must be verified on a case-by-case basis, so this generalization made by the government of the city of São Paulo is excessive.
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