Corporate - Group taxation

Last reviewed - 09 January 2024

Group taxation is prohibited in Peru.

Transfer pricing

Transactions between related parties and those entered into with parties domiciled in tax havens are subject to transfer pricing rules.

The existence of the transactions between related parties determine the application of specific valuation methods, which are established in the Income Tax law.

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

The benefit test must be accomplished when a domiciled entity receives a service rendered by any of its related parties. Such test is considered complied with when the rendered service provides economic or commercial value to the recipient of the service, improving or maintaining its commercial position, which occurs if independent parties have satisfied the need for the service. The providers’ cost structure must be proved.

If the domiciled entity complies successfully with the benefit requirement test, then the deduction of the cost or expense incurred for the services rendered would be accepted. Low value services must not exceed the margin of 5%.

Formal obligations

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

  • Local report: Mandatory for taxpayers whose accrued income in the taxable year exceeded 2,300 tax units. They must provide information of transactions that generate taxable income and deductible costs/expenses.
  • Master report: Mandatory for companies that are part of a group with profits higher than 20,000 tax units, and companies that would have performed transactions within the scope of transfer pricing rules, whose amount of operations is equal to or higher than 400 tax units. They must give information regarding the organisational structure of the group, description of their business, their transfer pricing policies for intangibles and financing, and their financial and tax status.
  • Country-by-country (CbC) report: Mandatory for domiciled companies within a multinational group. They must provide information of the global distribution of profits, taxes paid, and business activities performed by each entity of the group in any country.

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

According to the provisions of the PITL, the interest on debts and the expenses originated by the constitution, renewal, or cancellation of the same are considered as deductible expenses, provided that they have been contracted to acquire goods or services related to the obtaining or production of taxable income within the country or maintain its source of production.

As of 1 January 2021, thin capitalisation rules establish that net interest on the part that exceeds 30% of the EBITDA of the previous year will not be deductible ('Tax EBITDA rule'). For this purpose, EBITDA is understood to be the net income after compensation for losses plus net interest, depreciation, and amortisation.

Also note that the rule provides that net interests that could not have been deducted in the fiscal year due to exceeding the above-mentioned limit may be added to those corresponding to the next four fiscal years.

The aforementioned limit is not applicable to:

  1. Companies of the financial/banking and insurance system.
  2. Taxpayers whose net income in the taxable year is less than or equal to 2,500 tax units.
  3. Taxpayers who develop public infrastructure projects, public services, services related to these, applied research, and/or technological innovation that are carried out within the framework of the Legislative Decree of the Framework for the Promotion of Private Investment through Public-Private Associations and Asset Projects.
  4. Interest on debts for the development of public infrastructure projects, public services, services related to these, applied research, and/or technological innovation under the modality of Asset Projects within the framework of the Legislative Decree of the Framework for the Promotion of Private Investment through Public Private Associations and Active Projects
  5. Interest on indebtedness from the issuance of securities representing debt that meet certain conditions.

Interests indicated in (d) and (e) will be considered to calculate the legal limit. However, they will be deductible even if the amount exceeds the aforementioned limit.

As of 31 December 2021, specific rules were enacted for the calculation of the Tax EBITDA. In particular, the following rules, among others, were incorporated:

  • Tax EBITDA calculation in fiscal years with no positive result: If the taxpayer does not have taxable income from the previous fiscal year with which to calculate the Tax EBITDA (or having taxable income that was covered with losses from previous fiscal years or exceeded them), the Tax EBITDA will be the sum of the net interest, depreciation, and amortisation deducted in such fiscal year.
  • Deduction of net interests in subsequent fiscal years: Net interest that is not deductible in the taxable year for exceeding the limit of 30% of the Tax EBITDA may be deducted in the following four immediate fiscal years, along with the net interest of the corresponding year. The net interest that is not deducted must be added to the net interest of the next year (s) and will only be deductible in the part that does not exceed 30% of the Tax EBITDA.

    For the purposes of the aforementioned deduction, the net interest corresponding to the oldest fiscal year is considered first, as long as the statute of limitations of four years from the fiscal year following the generation of each net interest has not expired.
  • Tax EBITDA of corporate reorganisations: In the event of a business reorganisation, the limit is calculated based on the EBITDA of said fiscal year or the one corresponding to the previous fiscal year.
  • Tax EBITDA calculation for fiscal year 2021: In order to calculate the Tax EBITDA of fiscal year 2021, the following adjustments must be made to the net income after compensation of losses: (i) add the amount of depreciation and amortisation, (ii) add the amount of interest deducted in order to calculate said net income, and (iii) deduct the taxable interest income of said year.

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

Domiciled taxpayers are levied on their worldwide income, whereas non-domiciled taxpayers are levied only on their Peruvian-source income. Income obtained from the indirect transfer of shares issued by entities incorporated in Peru is deemed Peruvian-sourced. For such purposes, an indirect transfer of shares is deemed to exist when the shares of a non-domiciled entity, which in turn owns (directly or indirectly through other entities) shares issued by a domiciled entity, are transferred, provided the following two conditions are jointly met:

  • During the 12 months prior to transfer, the fair market value (FMV) of the shares of the Peruvian entity owned by the foreign entity equals 50% or more of the FMV of the shares of the foreign entity (the 50% test).
  • During any given 12-month period, shares representing 10% or more of the foreign entity’s share capital are transferred (the minimum rule).

Since 2019, an additional scenario for indirect transfer is included. An indirect transfer is considered when the total value of the shares of the domiciled entity being indirectly transferred is equal to or greater than 40,000 tax units. Such amount will be determined by applying the percentage obtained for the 50% test on the total value agreed for the sale of the shares transferred by the taxpayer and its related parties. 

The Regulations establish the methods by which the FMV of the shares will be calculated for purposes of the 50% test and also for calculating the capital gain. If the shares are listed in the stock exchange market, then the FMV will be highest quotation value. If not listed, the FMV will be determined by the discounted cash flow method; the equity value, in case of companies under control and supervision of the Peruvian Superintendence of Stock Market (SMV); the equity value adjusted by the average active market rate; or the appraisal value. The FMV method applicable will have to be determined on a case-by-case basis.