Place of the provision of the services and discussions generated by Complementary Law 157/2016
In general, a service is considered as rendered and the ISS (Service Tax) is due in the municipality of the establishment of the service provider or, in the absence of an establishment, the municipality of domicile of the service provider, except on some hypothesis in which the ISS is due in the place of domicile of the service hirer (Complementary Law 116/2003).
Complementary Law 157, published on December 29, 2016, brought relevant changes by including some activities to this exception, i.e., to determine that the ISS is due in the municipality of domicile of the service hirer on some activities. The activities included on this exception are the following:
President Temer, through Message 720 sent to the Federal Senate, by guidance of the Ministry of Industry, Foreign Trade and Services and the Ministry of Treasury, vetoed this change for understanding, generally, that such change could lead to the potential loss of efficiency and tax collection. Among the reasons for the veto, some specific reasons include the following:
However, at the end of May 2017, the National Congress overturned the vetoes in question and the vetoed parts were enacted by President Temer and published in the Official Press on June 1, 2017, so that ISS became due in the place of domicile of the service contractor in the cases described above.
It is important to notice that it is still under discussion as to when such change should be considered valid and that it is necessary to internalize such change in the legislation of the ISS of each municipality.
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