Although rules on the allocation of taxing rights for fees for technical services have been provided for in bilateral tax treaties by African, Asian, and South American countries for decades, it was only in the 2017 update that the UN Model Tax Treaty included Article 12A on the matter, thus suggesting its inclusion in the tax treaty network of its Member States. Consequently, from a cross-border perspective, the interpretation of Article 12A is of great importance for both taxpayers and tax authorities. This book presents the first comprehensive analysis of the scope of technical services in comparison to ordinary (non-technical) services and the differentiation between Article 12A and other allocation rules of the UN Model.

The book's analysis focuses on the interpretation of the concept of technical services by examining the historical evolution of Article 12 of the OECD and UN Models and the systematic context in which it is embedded. Aspects of this analysis examined include the following:

• the base-erosion principle as justification for establishing source taxing rights without the physical presence of the service provider in the state in which fees for technical services arise;

• whether the term 'technical' is sufficiently defined in the Commentaries to the UN Model or whether it shall be ascribed a different meaning to increase legal certainty for tax authorities and taxpayers;

• relevance of the OECD Model and its Commentaries as the basis for the UN Model and its Commentaries;

• rules of precedence concerning the application of Article 12A in relation to the other allocation rules of the UN Model;

• the connection between royalties and fees for technical services;

• application of Article 12A UN Model to challenges arising from the digitalized economy; and

• the allocation of taxing rights for fees for technical services rendered in a third state.

Tax treaties of selected African countries are examined, as these countries were the earliest adopters of the concept of fees for technical services into their tax treaty network. The book also provides an overview of literature and jurisprudence on country practices in Brazil, India, and other countries, as well as relevant documents of international organizations.

This book provides practitioners, government officials, and academics with a deep understanding of the interpretation and application of Article 12A UN Model. It will prove of great value in preparing for tax treaty negotiations and also in informing and advising enterprises that intend to conduct business in developing countries through the provision of specialized services.