Tax Newsletter - September 2026

Through Emergency Decree No. 010-2026, published on September 2, 2026, extraordinary and temporary measures were established to expedite, through the Works-for-Taxes mechanism, the execution of emergency Optimization, Marginal Expansion, Rehabilitation, and Replacement Services and Investments ("IOARR," by its Spanish acronym) related to the 2026-2027 El Niño Phenomenon.

These measures apply to the entities covered under Law No. 29230 that carry out such interventions in areas declared to be in a state of emergency, as well as to private companies, private supervising entities, and other participants in the mechanism.

Among its principal provisions, the Decree allows emergency IOARR to be included in the prioritization list without prior registration in the Multiannual Investment Program, and establishes that the selection of the private company and the private supervising entity shall be carried out through direct contracting.

In addition, various deadlines applicable to the execution of these interventions have been shortened: five (5) business days to approve the final version of the technical file or equivalent document; ten (10) business days to submit the settlement of the investment agreement and for the public entity to issue its ruling; and five (5) business days for the issuance of the CIPRL or CIPGN certificates. Furthermore, the public entity may directly assume supervision of the intervention and, exceptionally, the prior report of the Office of the Comptroller General of the Republic shall not be required, without prejudice to concurrent and subsequent oversight.

These measures shall remain in effect until December 31, 2027.

The Supreme Court examined the application of the interest capitalization rule, as well as the accrual of default interest during the period in which SUNAT and the Tax Court exceeded the statutory deadlines for resolving the taxpayer's administrative appeal (recurso de reclamación) and further appeal (recurso de apelación).

With respect to capitalization, the Chamber found that it had increased the tax debt and the fine by approximately 90%. Applying the binding precedent set forth in Cassation No. 6619-2021, the Court concluded that such rule should not be applied, as it violated the principles of reasonableness and non-confiscation.

The Court further held that no default interest should be charged during the period in which the statutory deadlines for resolving the administrative appeals were exceeded. In the case at hand, SUNAT took more than two additional years to resolve the administrative appeal, and the Tax Court exceeded the statutory deadline for resolving the further appeal by more than seven years, without establishing any circumstances justifying the delay or any dilatory or bad-faith conduct on the part of the taxpayer. Accordingly, the Court concluded that the accrual of interest during such periods violated the right to a reasonable period of time and the principle of reasonableness.

However, the Court dismissed as inadmissible the claim seeking the preemptive non-application of any interest that might accrue as a result of a possible delay in the judicial proceeding. It noted that standing to sue must be based on an actual and specific injury, and therefore any violation of the right to a reasonable period of time in judicial proceedings must be assessed once the delay has actually occurred, rather than preventively within the same proceeding.

SUNAT challenged the Income Tax withholdings made by a company in connection with various payments to non-domiciled service providers, on the grounds that the services received did not qualify as technical assistance but rather as royalties, and should therefore have been subject to a 30% withholding rate instead of the reduced rate applicable to technical assistance.

The Tax Court recalled that technical assistance involves the rendering of a service through which the provider applies its specialized skills and knowledge to transmit non-patentable know-how necessary for the development of the user's activity, whereas royalties essentially compensate for the assignment or use of intangibles or know-how, without any active performance on the part of the right holder. The Court further noted that the mere existence of specialized knowledge does not automatically characterize a transaction as a royalty.

In the case at hand, the Court found that SUNAT had failed to adequately substantiate why the services rendered should be characterized as royalties, and had not established that the transaction involved solely a transfer of know-how or usage rights. On the contrary, the contractual documentation showed the performance of advisory, training, monitoring, and supervision activities, the implementation of improvement plans, and the active participation of the service providers in the processes of the user company.

On that basis, the Court concluded that the tax administration had failed to properly substantiate the recharacterization of the services as royalties, and accordingly set aside the challenges related to the non-domiciled Income Tax withholdings and annulled the associated fines.

The Tax Court upheld SUNAT's challenge to the deduction of expenses arising from intragroup services rendered by related non-domiciled companies, for fiscal years 2018 and 2019. The dispute centered on whether the taxpayer had evidenced the actual rendering of the services, pursuant to subsection (i) of Article 32-A of the Income Tax Law ("LIR," by its Spanish acronym) for fiscal year 2018, and pursuant to Article 37 of the LIR for fiscal year 2019.

The Tax Court held that the mere submission of contracts, payment vouchers, accounting records, proof of payment, emails, internal reports, or transfer pricing studies is not sufficient, by itself, to evidence the actual rendering of the services. In particular, it noted that contracts evidence only an agreement of wills, and that emails, on their own, do not constitute sufficient evidence of the actual performance of the contracted services.

The Tax Court further stated that the taxpayer was required to maintain documentation reasonably evidencing the performance of the services, such as reports, deliverables, activity logs, or other evidence demonstrating the work actually carried out by the related service providers. As no such documentation had been submitted, the Court concluded that the actual rendering of the services at issue had not been evidenced.

Accordingly, the Tax Court upheld the Income Tax assessments and the application of the Additional Income Tax Rate associated with such disbursements.

The Tax Court upheld SUNAT's challenge to expenses deducted by a Peruvian branch corresponding to purported technical assistance services invoiced by its non-domiciled head office. As a central point, the Tax Court held that a branch lacks legal personality independent from that of its head office, and that it is therefore legally impossible for the head office to render services to its own branch pursuant to a bilateral contractual relationship.

On that basis, the Tax Court noted that the provisions of the LIR that recognize the branch as a taxpayer with respect to certain income do not create a legal entity distinct from the head office, nor do they transform the internal dealings between the two into sale-of-goods or service-rendering transactions. Accordingly, it concluded that a branch cannot be deemed to acquire services from its own head office merely because both are treated as separate taxpayers for certain tax purposes.

The Tax Court further observed that the documentation submitted by the taxpayer—consisting of contracts, bidding-process summaries, certifications, emails, internal manuals, and other documents—likewise failed to evidence the actual rendering of the alleged technical assistance services. In particular, it noted that the contracts could not support a valid agreement between the head office and the branch, while the remaining documents merely evidenced bidding processes, internal policies, or activities carried out by the head office, without demonstrating the actual rendering of a service in favor of the branch.

Accordingly, the Tax Court upheld the Income Tax assessment for lack of evidence of the reliability of the transactions and for the legal impossibility of finding that services had been rendered between the head office and its branch.