Peru

Transfer Pricing Regulations in Peru

The National Superintendency of Tax Administration and Customs (SUNAT), through Articles 32 and 32-A of the Income Tax Law (“LIR”), requires taxpayers to conduct their sales transactions, contributions of assets, and other property-related transactions, as well as the provision of services and any other type of transaction, at arm’s length. Transfer pricing rules apply to the following transactions: (a) those carried out by taxpayers with their related parties; or (b) those carried out from, to, or through countries or territories with low or no taxation.

Peru’s transfer pricing regulations underwent substantial changes through Legislative Decree No. 1312 and Supreme Decree No.333-2017-EF, which amended Articles 116 and 117 and subparagraph I) of paragraph I of Article 118 of the Regulations of the Income Tax Law. The main objective of implementing the Decree is to incorporate into national legislation the international standards and recommendations issued by the Organization for Economic Cooperation and Development (OECD) regarding anti-BEPS (Base Erosion and Profit Shifting) policies, specifically with respect to Action 13, which relates to documentation.

Decree No. 1312 took effect on January 1, 2017, and requires taxpayers to file the new Local Report Informative Affidavits, Master File, and Country-by-Country Report, thereby eliminating the requirement to file the Informative Affidavit on Transfer Pricing. Likewise, subsection (i) of Article 32-A has been included, which states that taxpayers must satisfy the Benefit Test for the deduction of costs and expenses arising from the provision of intra-group services, and it also specifies the characteristics that low-value-added services must meet and the 5% margin cap on costs and expenses that providers of such services may not exceed.

Related-Party Rules in Peru

Article 24 of the Regulations of the Income Tax Law sets forth the twelve (12) situations in which a related-party relationship is established for purposes of the Law, in addition to a special provision based on the relative importance of the sale of goods or services.

Therefore, a related-party relationship is established between:

• A person, whether an individual or a legal entity, holds more than 30% of the capital of another company.
• The same person, whether an individual or a legal entity, holds more than 30% of the capital of two or more legal entities, either directly or indirectly.
• When the aforementioned percentage is held by spouses or by individuals who are related by blood or marriage up to the second degree.
• More than 30% of the capital of two or more legal entities is owned by common partners.
• The companies or entities have directors, managers, administrators, or other executives in common.
• Two or more legal entities consolidate their financial statements.
• The parties to a business collaboration agreement with separate accounting, when they hold more than 30% of the agreement’s equity or when any of the parties has decision-making authority.
• A partner in a joint venture agreement, when they hold more than 30% of the business’s profits or earnings.
• Permanent establishments in the country in relation to their parent company abroad shall also be considered to have a relationship with all of these entities.
• A company domiciled in Peru, in relation to its permanent establishments abroad, will also be deemed to have an affiliation with all of these.
• Any legal entity or individual capable of exercising a controlling influence over the decisions of the governing bodies of one or more legal entities or organizations. Such influence is deemed to be exercised when, in the adoption of a resolution, the entity exercises or controls an absolute majority.
• Parties shall be considered related when a legal entity or entity resident in the country conducts 80% of its sales, provision of services, or other transactions with another person, company, or entity, provided that for the latter, this represents at least 30% of its purchases.

Formal Obligations: Informative Affidavits

Taxpayers subject to the scope of application of the Transfer Pricing regulations must comply with the following obligations, arising from the amendments to Article 32-A of the Income Tax Law (LIR) by Legislative Decree No. 1312.

• Informative Affidavit—Local Report (Bracket I): Taxpayers required to file this affidavit with the information detailed in Annex I of the Resolution are those who, during the taxable year to which the affidavit pertains:
• Their gross income exceeded two thousand three hundred (2,300) Tax Units (UIT); and
• Conducted transactions falling within the scope of transfer pricing rules, with a transaction amount equal to or greater than one hundred (100) Tax Units (UIT) and less than four hundred (400) Tax Units (UIT).

• Informative Affidavit—Local Report (Bracket II):  Taxpayers required to file the return containing the data, descriptive section, and details on the application of the methods referred to in Annexes II, III, and IV of the Resolution are those who, during the taxable year to which the return pertains:
• Their earned income exceeded two thousand three hundred (2,300) Tax Units (UIT) and
• Have carried out transactions falling within the scope of transfer pricing rules, with a transaction amount equal to or greater than four hundred (400) Tax Units (UIT).

• Informative Affidavit—Master Report: The following taxpayers must file the master report:
• Taxpayers whose accrued income has exceeded 20,000 UIT and
• Have carried out transactions falling within the scope of transfer pricing rules, with a transaction amount equal to or greater than four hundred (400) UIT.
• Informative Affidavit for the Country-by-Country Report (RPP): Taxpayers that are part of a multinational group must file the RPP annually.

• Parent company domiciled in the country of a multinational group, whose earned income is greater than or equal to S/2,700,000,000, according to the consolidated financial statements for the tax year preceding the return.
• A taxpayer domiciled in a country that is part of a multinational group, whose income—as shown in the consolidated financial statements that the non-domiciled parent company of the multinational group is required to prepare—accrued in

the tax year preceding the return, is greater than or equal to S/2,700,000,000; and any of the conditions detailed below apply:

• The non-domiciled parent company is not required to file the RPP tax return in its jurisdiction of domicile or residence.
• The parent company’s jurisdiction of domicile or residence has an international treaty or a decision by the Andean Community Commission in force that authorizes the exchange of tax information with Peru, but does not have an agreement between competent authorities for the exchange of RPP information in force with Peru.
• Where agreements for the exchange of RPP information with Peru are in effect, and there is a systematic failure to comply with the exchange of tax information, and SUNAT notifies the taxpayer of such noncompliance
• The taxpayer domiciled in the country has been designated by the multinational group as the representative parent company and notifies SUNAT of such designation.

The Multilateral Agreement of Competent Authorities for the Exchange of Country-by-Country Reports (MCAA). As of June 2022, there are 81 jurisdictions that exchange Country-by-Country Reports with Peru. See: http://www.oecd.org/tax/beps/country-by-country-exchange-relationships.htm

Deadline for filing annual affidavits.

The Annual Informative Transfer Pricing Affidavit—Local Report, using Virtual Form No. 3560, is filed through SUNAT Virtual. The filing dates for this return coincide with the schedule for May’s monthly filing deadlines, which are due in June of each year.

The Master File and the Country-by-Country Report are due according to the dates established for the schedule of monthly obligations for September of the fiscal year following the one to which the returns pertain; therefore, they are filed in October of each year.

Penalties for Noncompliance

SUNAT has the authority to adjust the value agreed upon by the parties when it determines that the resulting tax liability in the country is lower than what would apply under transfer pricing rules (Article 32-A of the Income Tax Law); if the prices agreed upon by the taxpayer are not valued in accordance with the Arm’s Length Principle, the Tax Authority.

Furthermore, pursuant to Article 177, paragraph 27 of the Income Tax Law (LIR), failure to produce or submit the documentation and information referred to in subsection g) of Article 32-A of the Income Tax Law or, where applicable, its translation into Spanish, which, among other things, supports the Local Report, Master Report, and/or Country-by-Country Report, a fine of 0.6% of net income (not less than 10% of the UIT nor more than 25 UIT) will be imposed.