Urgent Decree N° 021-2019 (the “Urgent Decree”) was published today in the official gazette “El Peruano”. The Urgent Decree extends until December 31, 2022, the validity of Law N° 27623 and Law N° 27624, which establish the Value Added Tax (VAT) and Municipal Promotion Tax (IPM) early recovery regime for mining and oil & gas titleholders during the exploration stage.
Additionally, in its Amending Complementary Disposition, the Urgent Decree modifies the second paragraph of article 84° of the Single Unified Text of the Mining Law (TUO). By means of this modification, it is established that mining titleholders who execute tax stability agreements (TSA) under articles 82° (12-year TSA) and 83°-A (15-year TSA) of the TUO, may request to keep their accounting books in dollars, as part of the benefits of the TSA, as long as they comply with the following requirements:
(i) The company must keep their accounting books in dollars for terms of at least five (5) consecutive tax years each time.
(ii) During the abovementioned period, the company will not be subject to inflation adjustment regulations.
(iii) The exchange rate used by the company for the payment of taxes shall be the most favorable one for the Peruvian State.
The Urgent Decree will enter in force in January 1, 2020, except for the provisions of the Amending Complementary Disposition, which will enter in force in December 6, 2019.
For further details, please contact Francisco Tong (ftong@estudiorodrigo.com), Francisco Barrios (fbarrios@estudiorodrigo.com) and/or Diego Pachas (dpachas@estudiorodrigo.com).
