PERU Law and Practice Contributed by: Tania Quispe, Raquel Cabrera, Ramzi Benzaquen and Jadhira Unda, +Value
9.7 Allocation of Profits to Permanent Establishments (PEs) Peruvian tax legislation does not expressly provide for rules on the allocation of profits to permanent estab - lishments. 10. Relevance of the United Nations Practical Manual on Transfer Pricing 10.1 Impact of UN Practical Manual on Transfer Pricing The UN Practical Manual on Transfer Pricing for Devel - oping Countries does impact transfer pricing matters in Peru. However, it is crucial to note that this impact is not exerted in a rigid manner but rather through train - ing sessions in which SUNAT participates. An example of this is Peru’s engagement in the “Tax Inspectors Without Borders” (TIWB) initiative through SUNAT. This initiative is a collaboration between the OECD and the United Nations Development Programme (UNDP). 11. Safe Harbours or Other Unique Rules 11.1 Transfer Pricing Safe Harbours Peruvian regulations do not contain specific provi - sions on transfer pricing safe harbours. 11.2 Rules on Savings Arising From Operating in the Jurisdiction There are no specific rules governing savings that arise from operating in Peru. 11.3 Unique Transfer Pricing Rules or Practices Peruvian transfer pricing rules consider specific provi - sions for the deduction of costs and expenses derived from operations with related parties for services. Sub - section i) of Article 32-A of the ITL, as well as Article 118-A of the ITLR, indicate that the services provided to the taxpayer by its related parties must meet the benefit test and provide the requested documentation and information, in order to be able to deduct said costs and expenses for the determination of the tax.
The documentation and information provided must demonstrate: • the effective provision of the service; • the nature of the service; • the real need for the service; • the costs and expenses incurred by the service provider; and • the reasonable criteria for assigning the costs and expenses. 11.4 Financial Transactions Peru’s transfer pricing rules on financial transactions are designed to ensure that these transactions reflect arm’s length pricing and are generally aligned with the OECD’s Chapter X, which provides guidance on inter - company financial arrangements. However, while Peru adheres to the principles outlined in Chapter X, there are no specific and detailed standalone rules govern - ing financial transactions such as loans, guarantees or other financing arrangements between related parties. 12. Co-Ordination With Customs Valuation 12.1 Co-Ordination Requirements Between Transfer Pricing and Customs Valuation While the CUPM includes rules applicable to the export or import of certain goods with recognised market quotations internationally, locally or in the destination market, or those that determine their prices based on market quotations and may be associated with customs regulations, as of now, there is no Peruvian legislation or official guidance that connects transfer pricing with customs valuation. Therefore, the market value determined through transfer pricing methods is independent from the customs value, and vice versa. 13. Controversy Process 13.1 Options and Requirements in Transfer Pricing Controversies Transfer pricing audits in Peru are conducted by SUNAT through a tax audit procedure. After this pro - cedure is completed, if a taxpayer disagrees with the outcome, they have the right to file a claim with
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