Global Tax Alert | 8 July 2013

Peru removes deduction limit for research and development expenses

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Law No. 30056 (the Law), Law amending several laws to facilitate investment, promote productive development and business growth, published in the Official Gazette on 2 July 2013, removes the deduction limit for research and development (R&D) expenses.

The deduction for R&D expenses was limited to no more than 10% of annual net income with a limit of 300 Tax Units (USD 396,000).

Under the Law, R&D expenses will be deductible in the fiscal year in which they are accrued, as long as the projects invested by public and private entities duly qualify in terms of the Income Tax regulations as R&D projects. If the projects are not qualified in the fiscal year in which the expenses are accrued, the deductibility of the expenses would be deferred until the fiscal year in which the qualification is obtained.

Finally, if the R&D expenses are not related to the core business of the company, but qualification is obtained before the due date of the income tax return, the deduction for the expenses will be limited to 65% limit.

The amendments to the R&D provisions will be effective 1 January 2014.

For additional information with respect to this Alert, please contact the following:

Ernst & Young Asesores S.C.R.L, Lima
  • Roberto Cores
    +51 1 411 4448
    roberto.cores@pe.ey.com
  • Fernando J. Nuñez
    +51 1 411 4448
    fernando.j.nunez@pe.ey.com
  • Luis M. Sánchez
    +51 1 411 4444
    luis-miguel.sanchez@pe.ey.com
Ernst & Young LLP, Latin American Business Center, New York
  • Paola Salvador
    +1 212 773 5545
    paola.salvadorlopez@ey.com

EYG no. CM3622