Brazil’s Superior Court of Justice (STJ) ruled, in a repetitive appeal (Theme 1323), that single-professional firms organized as limited liability companies (LTDA) may pay the Service Tax (ISS) under the fixed-rate system established by Decree-Law 406/1968, provided that specific conditions are met.
The decision clarifies that simply adopting the “LTDA” corporate form does not exclude a firm from the fixed ISS regime. To qualify, three requirements must coexist: (i) services must be personally rendered by the partners; (ii) each partner must bear individual technical responsibility; and (iii) the company must not operate with an entrepreneurial structure that removes the personal character of the activity.
The case arose from a São Paulo municipal rule denying the fixed-rate benefit to limited companies, arguing that this legal form undermines the personal nature of professional services.
With the STJ’s ruling, municipalities must now follow this interpretation: the limited-liability form alone is not enough to deny the fixed ISS rate. What matters is whether the firm actually performs personal professional services without a typical business organization.
For professional firms — such as law offices, medical clinics, and accounting or engineering practices — the decision brings greater legal certainty and potential tax savings, as long as they meet the requirements established by the STJ.
Photo: Canva
