Deadlines for Tax benefits of the Book Law are extended.- Through Emergency Decree N° 003-2019, the deadlines for tax benefits of the Book Law – Law N° 28086 are extended until October 11, 2020. These tax benefits are related to the IGV exemption for the sale in the country and import of books and editorial and related products, as well as the IGV return to the Book publishers.
Amendments related to tax exemptions to alienation of securities.- Through Emergency Decree N° 005-2019, article 2 of Law N° 30341 was amended. This Law promotes liquidity and integration of the Securities Market, as follows:
(i) Exemption of the Income Tax is extended until December 31, 2022 for the alienation of ordinary shares and investment shares, American Depositary Receipts (ADR) and Global Depositary Receipts (GDR), securities representing debts, negotiable invoices, among other securities.
(ii) It is established that the percentage limit set forth in point 3, article 2 of Law N° 30341 to determine if the securities are listed in the stock market, cannot exceed 45%.
Tax incentives are extended to promote the Real Estate Investment Funds (FIRBI).- Through Emergency Decree N° 009-2019, the treatment on the Income Tax applicable to the alienation for contribution of real estate to the FRIBI and the withholding rate applicable to the lease income or any other onerous form of assignment for use of real estate attributed by the FIRBI.
SUNAT will publish the following information in their Transparency Portal, classified according to the Taxpayers’ field and indicating whether it is a legal entity or individual:
(i) Percentage share in final withholding tax with a 5% rate.
(ii) Number of Taxpayers applying to the tax incentives.
(iii) Level of concentration of taxpayers according to the decile of total tax withholdings made at 5% rate.
(iv) Total amount of tax withholdings made at a 5% rate.
In addition, the special treatment on the real estate transfer tax carried out from January 1, 2016 as contributions to the FIRBI has been extended until December 31, 2022.
Amendments to the additional deduction for expenses in projects of scientific research, technological development and technological innovation.- Through Emergency Decree N° 010-2019, Law N° 30309 (Law that promotes scientific research, technological development and technological innovation) is amended from January 1, 2020 under the following terms:
(i) The validity term of the benefit is extended until fiscal year 2022.
(ii) The additional deduction will be applied based on the net income received by the taxpayer and depending on whether the expenses are made directly by the taxpayer or through research centers. The percentages are: 115%, 75% and 50%.
(iii) The deadline for qualifying the project and granting authorization for its execution will be 45 business days.
(iv) The annual tax deduction limit will be 500 TU.
Virtual form for tax refund requests is approved.- Superintendency Resolution No. 208-2019/SUNAT regulates the submission via SUNAT Virtual platform of the requests for the refund of IGV withholdings and collections that were not applied and any other undue payments or overpayments of tax debts, the administration of which is in charge of the SUNAT. For this purpose, the Virtual Form No. 1649 “Refund Request” has been approved and is available from November 1, 2019.
The “Electronic Issuance System for Controlled Companies” is created .- Through Superintendency Resolution No. 206-2019/SUNAT, a new electronic system is created for the issuance of receipts for public services and their respective credit and debit notes. It must be used as follows:
(i) From February 1, 2020: companies that provide public services for the supply of electricity and water.
(ii) From May 5, 2020: telecommunications companies, concessionaries that provide paging services and national or international long-distance carriers, and operators of the fixed and mobile telephone services.
Refund request: Communication of the Interbank Account Code.- Superintendency Resolution No. 210-2019/SUNAT regulates the form and conditions for communicating the Interbank Account Code (CCI) to SUNAT when the modality of payment into current account or savings account is chosen as a means of refund:
(i) The applicant must communicate the CCI via SUNAT Online Operations before submitting a refund request.
(ii) The Tax Administration has a period of 5 business days to confirm to the taxpayer that the CCI is valid.
Average Tax Rate on income from foreign sources.- Through Report N ° 135-2019-SUNAT/7T0000, SUNAT states that in the case of income tax credit – third category – for taxes paid abroad for income obtained abroad to which the average tax rate should be applied:
(i) The global net income from a foreign source will be determined in accordance with Articles 51 and 51-A of the Income Tax Law.
(ii) The aforementioned income obtained abroad is the total net income from a foreign source, regardless of whether or not they have been subject to withholding tax.
Capitalization of foreign company profits.- Through Report N° 120-2019-SUNAT/7T0000, it is established that the shares received by a Peruvian company as a result of the capitalization of profits of a foreign company in which it is a shareholder, does not constitute taxable income from a foreign source.
Debt expense deduction.- Through Report N° 130-2019-SUNAT/7T0000, it is established that in order to deduct interests and other expenses for debts incurred with non-domiciled parties, the condition provided for in subsection a.4) of article 37° of the Income Tax Law is applicable, that is, they will only be deductible in the year in which they are incurred if they are paid before the filing of the annual tax declaration, otherwise they will be deducted in the year in which are paid.
Stock market value.- Report No. 121-2019-SUNAT/7T0000 indicates that in relation to subsection c) of article 19° of the Regulation of the Income Tax Law, in order to determine the market value of ordinary shares non-listed in the Stock Exchange of a company incorporated in Peru, the equity value based on the last balance sheet closed at the end of the taxable year (December 31), which should not exceed a period of twelve months, will be considered.
Request for the refund of contributions to the National Pension System (Tax Court Resolution of mandatory compliance N° 08267-2-2019).- The following mandatory compliance criterion is established:
“Both the employer and the employee are entitled to request the refund of amounts that were unduly withheld before and/or amounts in excess paid to the Tax Administration as contributions to the National Pension System by the withholding agent.”
Application of Income Tax credit balance (Cassation No. 17628-2016) .- The Third Transitory Constitutional and Social Law Court establishes the following criteria:
“In accordance with articles 85 and 87 of the Single Revised Text of the Income Tax Law, and point 3 of article 55 of the Regulation of the aforementioned law, the taxpayer is authorized to request the return of payments on account made in excess for the year, or to allocate that amount for future payments on account; and once the taxpayer chooses a certain option, they will be linked to it, and the Tax Administration will execute its supervisory authority based on this option”.
In this case, the taxpayer applied the credit balance of fiscal year 2003 against the debt for the regularization of the 2004 Income Tax, until the balance was exhausted. For this reason, the payments on account of January and February 2005 were paid in cash by the Taxpayer. In this regard, the Tax Administration and the Tax Court stated that the credit balance had to be applied against the aforementioned payments on account, as the Company in their Sworn Statement stated that they decided to apply the credit balance and this option was never changed.
According to the Judiciary, since the taxpayer had already chosen to apply the credit balance against the debt for payments on account of the year, and did not submit a tax-offset request formally, it was not possible for the Taxpayer to unilaterally offsets its credit balance with another assumption (such as the regularization of the IR). Consequently, the aforementioned Court declared the cassation filed by the taxpayer unfounded.
Exchange difference (Cassation No. 17939-2015).- through which the Permanent Constitutional and Social Law Court establishes the following criteria:
“From the interpretation of article 61 of the Single Revised Text of the Income Tax Law, it is concluded that the nature of the exchange differences is, to be the computable result in the determination of the net income, not being considered a deductible expense as there is no relationship of interdependence with the commercial operations, thereby paragraphs m), n) and o) of article 44 of the aforementioned law are not applicable”.
The Tax Administration questioned the net exchange difference from loans from abroad because they are expenses for operations carried out with entities located in tax havens, stating that a systematic interpretation of subsections m), n) and o) of Article 44 of the Income Tax Law it can be concluded that the intention of the legislator was to prohibit any expense that comes from these operations.
In turn, the taxpayer stated that exchange differences are concepts that are calculated or taken into account to determine net income, therefore they are not considered an expenditure and the provisions of article 44 of the Income Tax Law do not apply to them. The Tax Court, the Court and the Merit Court confirmed this position.
Finally, the Supreme Court declares unfounded the cassation filed by SUNAT, stating that the exchange differences are the result of fluctuations or variations in the currency conversion and have no interdependence or accessory nature relationship with commercial operations and their expenses, therefore, Article 44 of the Income Tax Law is not applicable.
Change of basis in the resolution that addresses the claim (Tax Court Resolution No. 01712-3-2019) .- The Tax Administration issued a Resolution on the Fines imposed for the infringement that is defined in paragraph 1 of article 178 of the Tax Code, based on the tax assessment of Income Tax for the year 2012. However, the Administrative Resolution that resolved the claim filed by the taxpayer, SUNAT sustained the infringement by presenting a rectifying sworn affidavit that determined a lower credit balance.
After verifying that the basis of the Resolution on Fines was modified, the Tax Court annulled the appeal and, in application of the last paragraph of article 150 of the Tax Code, the value was render ineffective, since it was not properly sustained.
