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Tax Newsletter – February 2021

IMPORTANT NEWS

REGULATIONS OF INTEREST

Extension of deadlines for fulfilment of tax liabilities in departments with extreme and very high alert level is established.- Superintendence Resolution N° 016-2021/SUNAT, published on February 2, 2021, new due dates for certain tax liabilities are established:

A) For taxpayers receiving third category income who in taxable year 2020 would had obtained net income of up to 2,300 UIT (S/.9,890,000.00) or who had obtained or received income other than third category income that added together do not exceed that amount, and whose tax domicile, as at January 27, 2021, is located in those departments classified with Extreme Alert Level or Very High Alert Level:

(i) The due dates for the declaration and payment of monthly tax liabilities for the month of January 2021 are extended as follows:

ii) The maximum delay dates of the Registry of Sales and Revenue and the Registry of Electronic Purchases for the month of January 2021 are extended as follows:

iii) The extensions detailed above are also applicable to those taxpayers not subject to Income Tax other than the National Public Sector.

iv) If the taxpayers mentioned in the first paragraph request the refund of the credit balance subject to benefit after the expiration date that corresponds to them for the January period and until the expiration date of the February period, they must state “January 2021” as the period in such request and file the affidavit corresponding to such period.

Filing of appeals, writs and other requests related to electronic claim files.- Superintendence Resolution N° 031-2021/SUNAT, published on February 25, 2021, amends Superintendence Resolution N° 084-2016/SUNAT in order to allow the filing and submission of the aforementioned appeals, writs and requests to be made through the SUNAT Virtual Party Bureau.

New version of the PDT ISC, Virtual Form No. 615 is adopted.- Superintendence Resolution N° 019-2021/SUNAT, published on February 10, 2021, version 5.1 of the PDT ISC – Virtual Form No. 615 is adopted, which must be used from February 11, 2021, regardless of the period to which the return corresponds, even in the case of substitute or amending returns.

The new version of the PDT Electronic Spreadsheet – PLAME, Virtual Form Nº 601 is adopted and the form Declara Fácil 621 – IGV – Monthly Income is amended.- Through Superintendence Resolution N° 020-2021/SUNAT, published on February 12, 2021, version 3.9 of PDT Electronic Spreadsheet – PLAME is adopted and has been mandatory since February 12, 2021.

In addition, the form Declara Fácil 621- IGV-Monthly Income and Annex 1: Information of the Electronic Return are amended so that the tax debtors of the General Regime included in the scope of Law N° 31110, Act of the agrarian labor regime and incentives for the agrarian and irrigation, agro-export and agro-industrial sector, may prepare and file the monthly declaration of their payments on account of the third category Income Tax, as well as make the payment of these (if applicable). This new Declara Fácil 621 form must be used from February 10, 2021.

NATIONAL CURRENT ISSUES 

International Law Commission between Peru and Chile: Indirect transfer of Peruvian shares.- Report N° 001-2021-SUNAT/7T0000 states that within the framework of the ILC signed between Peru and Chile, the capital gain obtained by a resident of Chile from the indirect transfer of Peruvian shares as a result of the direct transfer of shares of a company resident in Chile, may only be subject to taxation in Chile.

Principle of non-discrimination in Decision 578. – Regarding the application of the principle of non-discrimination set out in Article 18 of Decision 578 of the Andean Community, Report No. 144-2020-SUNAT/7T0000 SUNAT concludes the following:

i) Investment funds or trusts domiciled in Colombia that obtain income from Peruvian source, are taxpayers of Income Tax as a foreign company, therefore, the income obtained from their investments in Peru will be taxed with Income Tax in Peru, provided that they correspond to assumptions taxed in the LIR, resulting irrelevant that such income is attributed to third parties under Colombian law as would be the case of an AFP; whereas for the purposes of the application of the non-discrimination clause, it must be established in each particular case whether the investment fund or trust qualifies as a “company” domiciled in Colombia, as well as the tax treatment according to the type of income obtained.

ii) The returns on assets supporting the technical reserves of life insurance companies incorporated or established in Colombia, as a result of their investments in Peru, made through investment funds or trusts incorporated in Colombia will be subject to income tax in Peru, provided that they correspond to taxable events in the LIR, taking into account that such investment fund or trust is the taxpayer of income tax as a foreign company; being that for purposes of the application of the non-discrimination clause it must be established in each particular case whether the investment fund or trust qualifies as a “company” domiciled in Colombia.

iii) Foundations legally established in Colombia that receive income from Peruvian sources are considered taxpayers of income tax in Peru and taxpayers of such tax, so the tax that applies to these subjects should not be more burdensome than that which applies to a Peruvian company for the same type of income, in accordance with the provisions of Article 18 of Decision 578, which must be evaluated in each particular case.

International Law Commission between Peru and Chile: Indirect transfer of Peruvian shares.- In Report No. 143-2020-SUNAT/7T0000 the Tax Administration concludes that dividends paid by a Peruvian company in favor of its Chilean shareholders (companies or investment funds) are subject to income tax withholding. However, only in the case of “Chilean resident companies” the limits set forth in Article 10 of the ILC must be taken into account. Such limits are not applicable if the Chilean shareholder is an “investment fund established in Chile” (being subject to the tax provided in the Income Tax Law), since such fund is not considered an income taxpayer in Chile, not qualifying as a “resident in Chile” for the purposes of the International Law Commission and, therefore, the provisions (limits) provided therein are not applicable.

Temporary transfer of film distribution rights.- Report No. 153-2020-SUNAT/7T0000 provides that the temporary transfer in use of the ” distribution right for cinematographic films” by a non-domiciled company (owner of such films) in favor of a domiciled company, is taxed with the IGV as “use of services provided by non-domiciled companies”.

Issuance of certificate of residence for the application of reduced rates provided in a ILC.- In Report No. 131-2020-SUNAT/7T0000, SUNAT states that, in those cases in which a domiciled subject assumes the Peruvian source Income Tax corresponding to its non-domiciled supplier, to whom it did not withhold the tax on the income paid, then, for the purpose of applying the reduced rates provided for in a ILC:

(i) The period for which the Certificate of Residence has been granted must include the date on which the payment was made to the non-domiciled supplier.

ii) The period of validity of 4 months from the date of issuance of the Certificate of Residence must include the date on which the payment was made to the non-domiciled supplier.

CASE LAW

Suspension of the computation of default interest for infringement of the reasonable period of time in administrative headquarters (Judgment rendered in Case No. 00225-2017-PA/TC).-

The taxpayer, alleging infringement of his right to a reasonable period of time at administrative proceedings, filed a petition for amparo in order for the Constitutional Court to rule on the collection of default interest for time in excess of the legal period that it took the Tax Court to rule on appeals filed by the taxpayer at administrative proceedings.

In light of certain case law, the Constitutional Court stated that, in order to verify whether the right to a reasonable term invoked by the taxpayer had been infringed, a series of aspects should be evaluated, such as the complexity of the matter in dispute in the administrative headquarters, the procedural activity or conduct of the taxpayer and the public administration, as well as the consequences that the delay in the resolution of the appeals produces on the parties.

Judges of the Constitutional Court, for the most part, considered that the matter in dispute at the administrative venue did not constitute a complex fact since the Administration only had to validate that the differences found in the taxpayer’s affidavit had the necessary support. Regarding the procedural conduct of the taxpayer, they considered that the company had not incurred in any type of action that caused the delay of the tax litigation proceedings.

Therefore, not appreciating the existence of circumstances or valid reasons that justified the excess in the legal period to resolve the taxpayer’s administrative appeals, the Constitutional Court resolved, by a simple majority of votes cast, to declare the amparo claim founded, ordering SUNAT to recalculate the debt, but without considering default interest for the time in excess of the legal period that it took the Tax Court to resolve said appeals.

Nullity of values due to change in the maintenance of the repair (RTF N° 6601-8-2020).- In the framework of the audit SUNAT questioned the tax credit declared by the taxpayer. In the result of the requirement of Article 75 of the Tax Code, SUNAT based such questioning on the non-compliance with the requirement of Article 18 b) of the Value Added Tax Law (i.e., that it had not been proven that the acquisitions were intended to an income-generating operation). However, when issuing the determination resolutions, SUNAT based the objection on the non-compliance with the requirement provided in paragraph a) of the same article (i.e., that the acquisitions were allowed as an expense or cost of the company).

The Tax Court ruled that the change in the basis for the objection violated the taxpayer’s right of defense, and therefore, in accordance with numeral 2 of Article 109 of the Tax Code, it proceeded to declare the nullity of the assessments issued (as well as of the subsequent acts in the proceedings related to such securities), thereby nullifying the fines related to such securities.

Donations for the population affected by natural disasters (RTF N° 4969-1-2020).- The taxpayer made donations under the provisions of Law No. 30498, Law that promotes the donation of food and facilitates the transportation of donations in situations of natural disasters, applying as tax credit the IGV paid on purchases related to such donations. Likewise, for IR purposes, the taxpayer declared tax loss in the corresponding fiscal year.

Since, according to paragraph x) of Article 37 of the LIR, donations cannot exceed the limit of 10% of the net taxable income of the year, SUNAT considered that, having declared a tax loss, the taxpayer could not deduct as an expense the value of what was donated, which meant that it could not enjoy the corresponding tax credit, since the requirement of paragraph a) of Article 18 of the IGV Law (i.e., that the acquisitions be allowed as an expense or cost of the company) was not met.

The Tax Court confirmed the objection stating that the special regime for donations provided for in Law No. 30498 does not entail the non-application of the limit provided for in paragraph x) of Article 37 of the LIR. Therefore, since no net income was obtained during the year, the taxpayer could not deduct the donations made as an expense and, therefore, could not enjoy the tax credit related to them, since the requirement of Article 18, paragraph a) of the IGV Law was not complied with.