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Peru Corporate - Group taxation

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Group taxation is prohibited in Peru.

Transfer pricing

The rules related to market value and transfer pricing establish that, in any kind of transaction, the value assigned to the goods and services must be the market value for tax purposes. If such value differs from the market value, either by overvaluation or sub-valuation, the tax administration will proceed to adjust it for both the purchaser and the seller, even when one of them is a non-domiciled entity, provided that the value agreed to results in a lower tax than the one that would have applied if transfer pricing rules had been applied. The adjustment will be imputed in the taxable period in which the operations with related parties were performed.

In case of transactions between related parties or those entered with tax havens, the market value will be equivalent to the value agreed with independent parties in similar transactions, being mandatory to support such value with a transfer pricing study.

The law states that transfer pricing rules will not apply for VAT purposes.

Benefit test requirement

For inter-company services, the benefit test must be accomplished as of 2017. Such test is considered accomplished when the service rendered provides economic or commercial value to the recipient of the service, improving or maintaining its commercial position.

The providers cost structure must be proved. Low-value services must not exceed a margin of 5%.

Formal obligations

New formal obligations have been approved. Such obligations are the following:

  • Informative tax return - Local report: Mandatory for taxpayers with profits higher than 2,300 tax units. They must report their transactions that generate taxable income and deductible costs/expenses. In force as of 2017.
  • Informative tax return - Master report: Mandatory for companies that are part of a group with profits higher than 20,000 tax units. They must report the organisational structure of the group, description of their business, their transfer pricing policies for intangibles and financing, and their financial and tax status. In force as of 2018.
  • Informative tax return - Country-by-country (CbC) report: Mandatory for companies within a multinational group. They must report the global distribution of profits, taxes paid, and their business activities for each entity in the group in any country. In force as of 2018.

Tax price adjustments

Adjustments to prices are only required whenever the price paid generates a higher tax deduction or a lower income tax in Peru; consequently, the existence of a tax prejudice will be required for an adjustment to be requested.

Adjustments are performed individually (on each operation) and not in an overall or global manner.

The adjustment of the value assigned by the tax administration or the taxpayer will be effective for both the transferor and the purchaser or transferee, without any constraints. In the case of non-domiciled parties, the bilateral adjustment will only proceed on transactions that could trigger taxable income in Peru and/or deductions for determining the income tax in Peru.

The adjustments are attributed to the corresponding tax period, according to the attribution rules depicted in the PITL (accrual regime for corporate taxpayers). However, when, under such rules, the adjustment cannot be attributed to a particular period, the adjustment will be allocated among all tax periods where income or expense has been allocated, in proportion.

Operations where no consideration has been paid are subject to transfer pricing rules. In this kind of transaction, the adjustment shall be allocated to the period or periods in which revenue would have accrued if consideration had been paid and the income was to be acknowledged by a domiciled taxpayer. On the other hand, if the income were to be recognised by a non-domiciled taxpayer, it would be attributed to the period or periods where the expenses accrued, even if it was a non-deductible expense, and the domiciled taxpayer would be responsible for payment.


There is a specific methodology for determining prices in the sales of internationally traded commodities to tax havens or intermediaries.

In this methodology, it is required to determine the price of the specified operation based on the international price without taking into account the particularities of each case.

Thin capitalisation

In the case of loans entered into between related parties, the amount of interest to be deducted is limited to interest from indebtedness not exceeding three times the entities net equity as of the end of the previous fiscal year. In this connection, even though Peruvian corporate law has no requirements as to a minimum amount of share capital to incorporate a legal entity, it should be noted that having a small share capital may jeopardise the deductibility of interest payable for loans granted by related entities since, in case of newly incorporated entities, the share capital (equity) to be considered for calculating the thin capitalisation limit is the original one (this is, the one with which the entity was incorporated). In any case, this will only trigger a deductibility problem for the fiscal year in which the entity is incorporated, since for the following fiscal year the thin capitalisation rule will be calculated on the basis of the net equity at the end of the prior fiscal year (which, at that moment, may have already been increased through new contributions or capitalisations).

As of 2019 and until 2021, the 3:1 ratio limitation will also be applicable to loans entered with not-related parties as of 14 September 2018 (following day to the enactment of the law that changed the rule). As of 1 January 2021, the amount of interest to be deducted will be limited to interest from indebtedness not exceeding 30% of the prior fiscal year earnings before interest, tax, depreciation, and amortisation (EBITDA) (net income after tax losses compensation plus net interests, depreciation, and amortisation). Interest that exceeds the threshold will be carried forward for the next four fiscal years.

Controlled foreign companies (CFCs)

CFC rules are in force in order to avoid the deferral of income tax on passive income obtained from CFCs (defined as at least 50% of ownership, voting rights, or gains) by domiciled taxpayers, provided such companies are situated in tax havens or jurisdictions with nil or reduced tax rates.

Taxation of indirect disposal of shares in Peruvian entities

The indirect transfer of Peruvian shares of a foreign entity that, in turn, owns (directly or indirectly through other entities) shares of a Peruvian entity is levied with income tax, provided that both of the following conditions are met:

  • During the 12 months prior to the transfer, the market value of the Peruvian entity’s shares owned by the foreign entity equals 50% or more of the market value of the foreign entity’s shares.
  • During any given 12-month period, shares representing 10% or more of the foreign entity’s share capital are transferred. From 1 January 2019, this percentage will include shares disposed by a seller or its related parties, either in one transaction or in several other simultaneous or successive transactions.
  • From 1 January 2019 and onwards, if the total amount (calculated as established by the Decree) of the Peruvian entity's shares to be transferred sums up to or surpasses 40,000 tax units (approximately PEN 166 million for fiscal year 2018), regardless of whether the above-mentioned conditions are satisfied or not.

Last Reviewed - 31 July 2019

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