Article 32 of the Income Tax Law (LIR) sets out that, in the cases of sales, contributions of goods and other transfers of property, rendering of services and any other type of transaction under any title, the value assigned to the goods, services and other benefits, for tax purposes, shall be the market value. If the value assigned differs from the market value, either due to overvaluation or undervaluation, the Tax Administration - SUNAT may review the transactions and adjust such value for both the acquirer and the transferor.
Subclause 4 of the mentioned article states that for transactions between related parties or transactions made from, to or through non-cooperative countries and territories or those with low or no taxation; or the transactions carried out with individuals whose taxes, revenues or profits from such transactions are subject to a preferential tax regime; the prices and amount of the considerations that would have been agreed with or between independent parties in comparable transactions, under the same or similar conditions, in accordance with the provisions of Article 32.
Article 32-A of the LIR and Chapter XIX of its Regulations regulate the transfer pricing rules, which are largely aligned with the recommendations of the Organization for Economic Cooperation and Development (OECD) formulated in the BEPS Plan Actions, as well as in the Transfer Pricing Guides. Their objective is to determine that the prices between related parties or with companies located in tax havens[1] are prices that comply with the arm's length principle.
Legal basis: Subclause 4) of article 32° and subsection a) of article 32°- A[2] of the LIR, and article 108[3] of the LIR Regulations.
https://www.sunat.gob.pe/legislacion/renta/ley/capv.pdf
https://www.sunat.gob.pe/legislacion/renta/regla/cap19.pdf
[1] Tax havens, hereinafter referred to as: “Countries or non-cooperative jurisdictions or with low or zero taxation” and “Preferential Tax Regimes”.
[2] Amended by Article 3° of Legislative Decree No. 1381, published on 8.24.2018.
[3] Amended by Article 2° of Legislative Decree No. 340-2018-EF, published on 12.30.2018.
1.1. Scope of application
In accordance with Article 32-A of the LIR, the transfer pricing rules shall be applicable to transactions carried out by taxpayers with their related parties or those carried out from, to or through countries or territories of low or no taxation. However, the value agreed upon by the parties shall only be adjusted to the value resulting from the application of the transfer pricing rules in the cases provided for in subsection c) of this article.
1.2. Related parties
Two or more persons, companies or entities are considered to be related parties when one of them participates directly or indirectly in the management, control or capital of the other; or when the same person or group of persons participates directly or indirectly in the management, control or capital of several persons, companies or entities.
The linkage will also operate when the transaction is carried out using interposed persons whose purpose is to disguise a transaction between related parties. Article 24 of the LIR regulations establish the cases in which such linkage is configured.
Legal Basis: Subsection b) of Article 32-A of the LIR.
https://www.sunat.gob.pe/legislacion/renta/regla/cap19.pdf
1.3. Tax havens
1.3.1 Non-Cooperative Countries and Territories or with Low or No Taxation Under a Preferential Tax Regime
Countries or territories that meet any of the following criteria are considered non-cooperative or low or no taxation countries or territories:
Absence of transparency at the legal, regulatory or administrative functioning level..
No exchange of tax information or the existence of legal regulations or administrative practices that limit such exchange.
No or low effective taxation, understood as a corporate income tax rate equal to zero or less than 60% of the rate that would apply in Peru on corporate income.
In addition, Annex 1 of the Income Tax Law Regulations includes a specific list of countries and territories that have been classified as non-cooperating or with low or no taxation[4], which list may be modified by Supreme Decreem.
Other countries or territories may be included in said annex through Supreme Decree provided that they meet with the aforementioned criteria. Also, other may be excluded, provided that they meet any of the criteria, such as: a) They are members of the OECD; b) They have a Double Taxation Avoidance Agreement in force with Peru that includes an information exchange clause; or c) They effectively exchange information with Peru and such exchange is not limited by their legal provisions or administrative practices.
Legal basis: Article 86° of the LIR Regulations.
https://www.sunat.gob.pe/legislacion/renta/regla/cap16.pdf
[1] Actualmente son 44: 1. Anguila 2. Antigua y Barbuda 3. Aruba 4. Bailía de Jersey 5. Barbados 6. Belice 7. Bermudas 8. Curazao 9. Estado Independiente de Samoa 10. Federación de San Cristóbal y Nieves 11. Gibraltar 12. Granada 13. Guam 14. Guernsey 15. Isla de Man 16. Islas Caimán 17. Islas Cook 18. Islas Monserrat 19. Islas Turcas y Caícos 20. Islas Vírgenes Británicas 21. Islas Vírgenes de Estados Unidos de América 22. Labuán 23. Mancomunidad de Dominica 24. Mancomunidad de las Bahamas 25. Niue 26. Principado de Andorra 27. Principado de Liechtenstein 28. Principado de Mónaco 29. Región Administrativa Especial de Hong Kong 30. Reino de Bahréin 31. Reino de Tonga 32. República de Chipre 33. República de las Islas Marshall 34. República de Liberia 35. República de Maldivas 36. República de Nauru 37. República de Panamá 38. Republica de Seychelles 39. Republica de Trinidad y Tobago 40. República de Vanuatu 41. Sint Maarten 42. San Vicente y las Granadinas 43. Samoa Americana, y 44. Santa Lucía. Esta lista podrá ser actualizada periódicamente.
1.3.2. Preferential Tax Regimes
Preferential tax regimes are those that meet at least two of the following criteria:
a) That the country or territory of the tax regime does not have a Tax Information Exchange Agreement or Double Taxation Avoidance Agreement in force that includes an information exchange clause; or if these exist, they do not comply with the exchange of information with Peru or such exchange is limited by application of its legal rules or administrative practices, with respect to such tax regime.
b) Absence in the country or territory of the fiscal transparency regime at the legal, regulatory or administrative operation level, with respect to such regime.
c) That the applicable income tax rate on taxes, income or profits subject to the tax regime, in accordance with Article 87, regardless of the denomination given to this tax, is zero percent (0%) or less than sixty percent (60%) of the rate that would apply in Peru on income of the same nature to domiciled individuals.
d) That the tax regime excludes, explicitly or implicitly, the residents of the country or territory from such regime, or that the subjects benefited by such regime are prevented, explicitly or implicitly, from operating in the domestic market.
e) That have been classified by the OECD as pernicious or potentially pernicious regimes for complying with subparagraph (iii) of the fourth paragraph of subsection m) of article 44 of the Law, even when the country or territory of the regime is in the process of eliminating or modifying them.
Legal basis: Article 86° of the LIR Regulations.
1.4. Non-deductible expenses in tax havens
Subsection m) of article 44 of the LIR establishes the criteria to be taken into account for the qualification of non-cooperating countries or territories or low or no taxation or preferential tax regimes, which must be based on at least one of the following aspects: (i) Absence of transparency at the legal, regulatory or administrative functioning level; (ii) No exchange of information or existence of legal rules or administrative practices that limit it; (iii) Absence of the requirement of substantive local presence or the exercise of a real activity or with economic substance; (iv) No or low effective taxation.
Additionally, the qualification criteria for preferential tax regimes must be based on at least one of the following aspects: (i) Absence of transparency at the legal, regulatory or administrative functioning level; (ii)No exchange of information or existence of legal rules or administrative practices that limit it; (iii) Absence of the requirement of substantive local presence or the exercise of a real activity or with economic substance; (iv) No or low effective taxation; (v) Tax benefits or advantages that explicitly or implicitly exclude residents, or that the subjects benefited by the regime are explicitly or implicitly prevented from operating in the domestic market; (vi) Exclusive taxation of income from national or territorial sources.