The legislative decree reduces the threshold at which taxpayers must route payments through the Peruvian banking system. It also allows taxpayers to make payments to nonresidents through foreign banking/financial entities for certain transactions.
On 3 March 2022, Peru’s President enacted Legislative Decree 1529, amending Law 28194, which regulates the use of the Peruvian banking system for tax purposes.
Background
On 27 October 2021, Peru’s President asked Congress for the power to enact tax measures. On 27 December 2021, the Congress approved the President’s request to enact different tax measures, including measures to improve the use of the Peruvian banking system for tax purposes. For information on the approval of the President’s request to enact certain tax measures, see EY Global Tax Alert, Peru enacts law allowing the President to enact various tax measures, dated 4 January 2022.
Legislative Decree 1529
According to Law 28194, taxpayers should route any payment over PEN3,500 or US$1,000 through the Peruvian banking system. Otherwise, taxpayers will: (i) not be able to claim the payment as a deductible expense for corporate income tax purposes; or (ii) lose any tax basis (cost basis), depending on the type of payment.
Legislative Decree 1529 reduces the threshold from PEN3,500 or US$1,000 to PEN2,000 or US$500. Therefore, taxpayers must route any payment over PEN2,000 or US$500 through the Peruvian banking system.
For the following transactions, the legislative decree also requires payments equal to or more than 1 Tax Unit (US$1,222) to be made using the Peruvian banking system:
Transfers of real estate rights or property
Transfers of vehicles (ships, aircraft or land vehicles)
A cash contribution for the incorporation of a company, as well as any capital increase or capital reduction of a company
Additionally, Legislative Decree 1529 allows payments to nonresidents for international trade transactions, the acquisition of real estate, or the acquisition of shares and other securities to be made through foreign banking/financial entities (unless the foreign banking/financial entities are residents of tax havens; in that case, the payment will not be valid for Peruvian tax purposes). Before this amendment, taxpayers had to route payments to nonresidents for the acquisition of real estate, shares and other securities through the Peruvian banking system.
For purposes of Law 28194, Legislative Decree 1529 directs taxpayers to make payments directly to the seller, creditor or service provider. When the payment is made to a third party appointed by the seller, creditor or service provider, however, the taxpayer should communicate the appointment to the Peruvian tax authority before making the payment.
The amendments are effective 1 April 2022, except for the provision on banks and financial institutions that are residents of tax havens, which is effective 1 January 2023.
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.
