For income tax purposes, the following entities, among others, are considered as resident entities in Peru:
- Corporations duly incorporated in Peru.
- Branches, agencies, and permanent establishments (PEs) in Peru of non-resident individuals or entities.
- Partnerships and limited liability companies.
Permanent establishment (PE)
According to the PITL, a foreign company is considered to have a PE (i) if it has a fixed place of business through which it carries out business activities in whole or in part; (ii) if an individual has a power of attorney of a foreign entity and uses it on a regular basis to sign agreements on behalf of the foreign entity; and (iii) if the person with powers of attorney of the foreign entity keeps in Peru inventory and/or goods to be negotiated in Peru on behalf of the foreign entity.
The consequence of a PE presence in Peru is that the PE will be obligated to comply with all the formal and substantial tax obligations of any domiciled taxpayer, meaning that it will have to be registered before the tax administration (get a tax identification [RUC] number), issue/receive invoices, keep full accounting books, file monthly and yearly tax returns, withhold taxes, allocate a reasonable income for its Peruvian source activities, etc. If a PE presence is determined, then the tax contingency will have to be quantified by calculating the taxes, fines, and interest accrued as from the moment in which the PE presence can be deemed, except for the period barred by statute of limitations.