PERU Law and Practice Contributed by: Tania Quispe, Raquel Cabrera, Ramzi Benzaquen and Jadhira Unda, +Value
In terms of formal obligations, the main differences with respect to the OECD Guidelines are the following. • Local File Informative Return – the taxpayer must present a functional and economic analysis of the operations that exceed a materiality amount (2.5 tax units). Likewise, they report on the amounts and dates effectively collected and/or paid of the intercompany operations. They must include a Benefit Test analysis for the service operations received. • Master File Informative Return – this must include a chart illustrating the legal structure, legal corporate structure of each subsidiary, as well as a detailed table of such structure, ie, including name or cor - porate name, tax identification number, country or jurisdiction and percentage of shareholders capital participation. • CbCR Informative Return – there are no differ - ences related to the information required; however, SUNAT requests that the information follows a certain order, prior to its declaration. Therefore, the taxpayer responsible for ensuring that the declara - tion is in an XML file or it will not be accepted by the Administration’s system. Additionally, recent regulatory amendments have introduced a differentiated technical framework for the application of “other methods”, distinguishing them from traditional transfer pricing methods. Under this framework, certain technical rules applicable to tradi - tional methods, such as comparability adjustments, the use of interquartile ranges, and the elimination of differences, do not apply to “other methods”, which are instead supported by internationally accepted valuation practices and a technical valuation report. 9.2 Arm’s Length Principle The transfer pricing regime in Peru is aligned with the arm’s length principle established in the OECD Guide - lines. 9.3 Impact of the Base Erosion and Profit Shifting (BEPS) Project In order to prevent and avoid tax avoidance between related companies, SUNAT has implemented in the legislation some actions of the BEPS Project on trans - fer pricing, as set out below.
• In light of Actions 6 and 14 related to avoiding the abuse of double taxation agreements (DTAs), the IPL incorporates in its negotiation models those indicated in these Actions in order to be more effective and to have a procedure for solving con - troversies arising from their application. Regard - ing this last point, the Tax Administration issued a guide for the taxpayer and other interested parties on MAPs that establishes the rules, guidelines and procedures according to the minimum standard required in Action 14. • In light of Action 10 related to the treatment of intra-group services, the Tax Administration has incorporated some proposals in its regulations for the purposes of testing the deductibility of the expense. These can be found in Legislative Decree 1312. • Lastly, in light of Action 13 regarding formal obliga - tions on transfer pricing, the ITL follows the three levels of documentation suggested by the OECD’s BEPS Project. This can also be found in the afore - mentioned Decree. 9.4 Impact of BEPS 2.0 Currently in Peru, Pillars One and Two have not yet been considered as priority state policies by the Exec - utive Branch or by the Legislative Branch. Therefore, at the present time there are no initiatives linked to them. However, in the next few years, these Pillars will be developed, with greater emphasis on Pillar Two. 9.5 Pillar One Amount B Peru has not yet enacted regulatory adjustments for the implementation of a simplified approach under Pil - lar One – Amount B. 9.6 Entities Bearing the Risk of Another Entity’s Operations ITL legislation has not implemented a restriction regarding taxpayers assuming the operational risks of other entities to ensure a guaranteed return. In gen - eral, any transaction subject to transfer pricing rules must comply with the correct allocation of market val - ue, the application of the most appropriate method, the profit test (if applicable), among other established obligations. Assessing the variance in risk assumption is crucial for determining the level of comparability between controlled and uncontrolled transactions.
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