4.1. Unilateral APAs

4.1.1. Concept and purpose

Unilateral APAs are civil law treaties entered into between the Tax Administration (SUNAT[1])  and domiciled taxpayers that carry out transactions with their related parties, which are carried out from, to or through non-cooperating countries or territories or low or no taxation countries or territories; or which are carried out with subjects whose income, revenues or profits from such transactions are subject to a preferential tax regime.

Their purpose is to determine the methodology, and if applicable the price, that supports the different transactions that the taxpayer carries out with related parties or from, to or through non-cooperating countries or territories of low or no taxation; or with subjects whose income, income or profits from such transactions are subject to a preferential tax regime.

Legal basis: Subparagraph I, subsection a), subclause 1 and 2 of Article 118 of the Regulations LIR.

4.1.2. Presentation of the proposal

Taxpayers that decide to enter into unilateral APAs must submit to the Tax Administration, prior to the execution of operations, a valuation proposal for future transactions they carry out with their related parties; from, to or through non-cooperating or low or no taxation countries or territories; or with subjects whose income, revenues or profits from such transactions are subject to a preferential tax regime. The valuation proposal may refer to one or more transactions individually considered.

The proposal must provide the necessary information and documentation to explain the relevant facts of the methodology to be used and, if applicable, the price determined, and evidence that such transaction or transactions will be carried out within the conditions that would have been used by independent parties in comparable transactions.

The valuation proposal must be signed by all the related parties involved in the transaction.

Legal basis: Subparagraph i, subsection b) of Article 118° of the LIR Regulations.

4.1.3. Content of the proposal

The proposal for holding the unilateral APA will primarily contain:

1. The description of the transaction or transactions that will be part of the agreement.

2. The related parties involved in the transaction(s) that will form part of the arrangement.

3. The most appropriate valuation method.

4. The selection of comparable companies or transactions and the supporting information. 

5. The taxable years over which the comparable have been analyzed. 

6. The adjustments corresponding to the selected comparable. 

7. The price or, if applicable, a range of prices, amount of consideration or profit margin. 

8. The underlying assumptions on which the proposal is formulated.

Legal basis: Subparagraph I, subsection c) of Article 118° of the LIR Regulations.

4.1.4. Period for review of proposal

The Tax Administration shall have a period of twenty-four (24) months, counted from the date on which the proposal was submitted, to approve or reject it. The term may be extended for an additional twelve (12) months.

Legal basis: Subparagraph I, subsection d) of Article 118° of the LIR Regulations. 

4.1.5. Approval or rejection of proposal

After examining the proposal, the Tax Administration may:

• Approve the proposal formulated by the taxpayer.
• Approve an alternative proposal to the one originally formulated by the taxpayer, in consensus with the taxpayer.
• To reject the proposal formulated by the taxpayer.

Legal basis: Subparagraph I, subsection e) of Article 118° of the LIR Regulations.

4.1.6. Validity

Unilateral APAs will apply to the current taxable year in which they have been approved and during the three (3) subsequent taxable years.

Legal basis: Subparagraph I, subsection g) of Article 118° of the LIR Regulations.