The President may issue Legislative Decrees to enact certain tax measures, including regulating how silent partnerships are taxed and extending the value-added tax (VAT) exemption.
On 27 December 2021, Peru enacted Law 31380, approving the President’s request to enact tax measures. The law, however, narrowed the scope of those tax measures. For information about the President’s request, see EY Global Tax Alert, Peru’s President asks Congress for power to enact different tax measures, dated 3 November 2021.
Law 31380
Law 31380 allows the President, for 90 calendar days, to enact various tax measures. Under the law, the President may enact the following provisions:
Income tax
- Modify the rates applicable to nonresidents for fishing and the commercialization of hydro biological resources
- Regulate how associative contracts (silent partnerships) are taxed
- Modify the fair market value rules applicable to securities
Stability contracts
- Modify the rules for stability contracts on tax matters into which Peruvian companies with foreign investments and the Government enter (i.e., a contract that sets a fixed corporate income tax rate)
VAT
- Extend the current VAT exemption
Tax Code
Improve the Peruvian tax authorities’ powers in audits
Simplify rules on tax claims and procedures
Other tax measures
Allow the Tax Authority to create profiles for each taxpayer and classify them based on their compliance with their tax obligations
Improve the Tax Identification Registry
Modify the rules for using the Peruvian banking system in transactions carried out by taxpayers
Modify the provisions in Peru’s legislation for taxes imposed by local governments
Establish an accelerated depreciation regime for the aquaculture and forestry sector
Modify the terms for the payment of customs duties, refunds and the creation of a special customs regime for isolated border towns
The President will only be able to enact these provisions through Legislative Decrees until 27 March 2022. However, the President had to enact income tax measures on or before 31 December 2021, for those measure to apply for tax year 2022. A Tax Alert on those income tax measures is forthcoming.
Out of scope
Congress did not grant the President the power to enact the following measures:
Income tax
Modify the rates applicable to nonresidents for international activities performed partially in Peru and partially abroad
Modify the rules for deducting expenses and costs for purposes of determining the corporate income tax
Tax dividend distributions between Peruvian corporations
Modify the rates and deductions applicable to an individual’s labor income
Mining tax regime
- Modify the mining tax regime, including revising the deductibility of the amount effectively paid as a mining royalty, a special tax on mining, and the so-called special mining burden
VAT
Establish a mechanism for the collection of VAT in the digital economy (online platforms)
Subject life insurance policies to VAT
For additional information with respect to this Alert, please contact the following:
Ernst & Young Asesores S.C.R.L, Lima
- Roberto Cores
- Ramón Bueno-Tizón
- Ingrid Zevallos
Ernst & Young LLP (United States), Latin American Business Center, New York
- Lucas Moreno
- Ana Mingramm
- Pablo Wejcman
- Enrique Perez Grovas
Ernst & Young Abogados, Latin America Business Center, Madrid
- Jaime Vargas
Ernst & Young LLP (United Kingdom), Latin American Business Center, London
- Lourdes Libreros
Ernst & Young Tax Co., Latin American Business Center, Japan & Asia Pacific
- Raul Moreno, Tokyo
- Luis Coronado, Singapore
For a full listing of contacts and email addresses, please click on the Tax News Update: Global Edition (GTNU) version of this Alert.
