Diverse provisions related to Income Tax are amended.- Through Emergency Decree No. 025-2019:
(i) The income tax exemption for the income of encumbered foundations and non-profit associations is extended until December 31, 2020.
(ii) The distributors of shares in mutual fund investments are designated as withholding agents.
(iii) It was established that the ex-officio return for overpayments for work income will be made from the business day following the expiration of the deadline for the presentation of the annual tax return of the corresponding year. This return must be through account payment.
Changes in Legislative Decree No. 1372 – Final Beneficiary.- By means of Emergency Decree No. 025-2019, Legislative Decree No.1372 is amended. This decree regulates the obligation of legal persons and/or legal entities to inform the identification of the final beneficiaries:
(i) It was determined that the Central Reserve Bank, the Catholic Church, Public Administration Entities, Public Universities, Institutes, among others were exempted from the presentation of the statement of the final beneficiary.
(ii) It is required that in the case of trusts or investment fund, the person who exercises the final control of the property or is entitled to the results or profits, will qualify as the final beneficiary.
Exemptions from the General Sales Tax (IGV) are extended.– Through Emergency Decree No. 024-2019, the tax benefits and exemptions of the IGV deadlines were extended until December 31, 2020, these benefits and exemptions are applicable to the operations contained in Appendices I and II of the LIGV, the issuance of electronic money in accordance with the provisions of Law 29985; as well as the return of taxes levied on purchases with donations from abroad and imports of diplomatic missions and others, provided for in Legislative Decree No. 783.
Tax benefit of the definitive return of the General Sales Tax (IGV) is extended.- By means of the Emergency Decree N° 021-2019, the validity of Law No. 27623 is extended until December 31, 2022, Law that provides for the refund of the General Tax Sales and Municipal Promotion Tax to mining activity owners during the exploration phase and Law No. 27624 which provides for the return of the General Sales Tax and Municipal Promotion Tax for hydrocarbon exploration. Amendment of the Graduality Regime.- In Bulletin No. 79 – October 2018, changes were reported to the infractions related to the issuance of payment vouchers contained in article 174 of the Tax Code, as well as the incorporation of a new infringement in article 175 of the Tax Code, related to the late keeping of electronic books or records.By means of the Superintendency Resolution N 226-2019/SUNAT, the Regulation of the Graduality Regime is adapted to the following amendments: Infractions of article 174°: The calculation of the frequency criterion and the form of presentation of the recognition certificate is adjusted, in view that the offender will have less time to enjoy the benefits of the gradual regime. These changes will be effective from January 2, 2020.Infraction of section 10 of article 175: The applicable criteria of gradualness and the discounts for the fine are regulated, ranging from 90% to 40% and with effect from November 8, 2019.
Adjustment to the cost by application of the International Financial Reporting Standards (IFRS).- Through Report N°149-2019-SUNAT/7T0000, SUNAT states that when, by application of IFRS, an adjustment is made that reduces the cost of acquisition or production of a movable property qualified as a fixed asset:
(i) It is not appropriate to deduct as an expense the amount of the adjustment in the last year in which the movable property records depreciation for accounting purposes, because such deduction is not provided for in the Income Tax Law (LIR) or in its Regulation as a possibility for the recovery of investment in fixed assets.
(ii) Such adjustment will be deducted as part of the computable cost of the asset if it is disposed of before it is fully depreciated.
(iii) The adjustment may be deducted as an expense, if the movable property is written off due to disuse or obsolescence.
Disposal of assets acquired before January 1, 2004.- Through Report N° 157-2019-SUNAT/7T0000, it is established that they are not taxed with the Income Tax on the income obtained from the disposal of a property whose rights were acquired at two different times by the same natural person considering that the first acquisition was before January 1, 2004 and the other after that date.
Derivative Financial Instrument (IFD) with coverage purposes.- In Report N° 147-2019-SUNAT/7T0000, it is indicated that the IFD hired an entity domiciled in the country that is not authorized to keep accounting in foreign currency, for the purpose of mitigating the foreign exchange risk that would result from having an account receivable in national currency, it does not qualify as an IFD with coverage purposes.
Tax stability agreement prior to January 1, 2019.- The second paragraph of article 76° of the LIR, with Legislative Decree No. 1369, was repealed. This paragraph established that taxpayers who count as expense or cost compensation and others, in favor of not domiciled, they should pay the treasury the amount equivalent to the withholding in the month in which their accounting record occurs. Likewise, subsection a.4) was incorporated into Article 37 of the LIR which provides that these remunerations may be deducted as cost or expense in the taxable year to which they correspond when they have been paid or credited within the period established for the presentation of the annual affidavit.In the Report 166-2019-SUNAT/7T0000, the effects of this regulatory change for domiciled taxpayers who signed a Tax Stability Agreement within the framework of the General Mining Law, stabilizing the current Income Tax regime before the publication of Legislative Decree No. 1369, are analyzed. In this regard, SUNAT states that as of January 1, 2019:
(i) The repeal of the second paragraph of article 76 of the LIR will apply as long as it affects the non-domiciled entity.
(ii) The condition for deduction of expenses incorporated by Legislative Decree No. 1369 is not applicable.
Assignment of contractual position in a License Agreement for the exploration and exploitation of hydrocarbons.- Through Report N°169-2019-SUNAT/7T0000 the following is established:
(i) The assignment of contractual position for valuable consideration in a License Agreement for the exploration and exploitation of hydrocarbons is taxed with the IGV.
(ii) In accordance with the regulations of the Tax Stability Guarantee and the Tax Regulations of the Organic Hydrocarbons Law, the income that a contractor could obtain for the assignment of contractual position qualifies as income attributable to the concept “Other Activities”, defined in said regulation.
Deduction of interests in factoring companies.- In Report N°182-2019-SUNAT/7T0000 it is stated that the exception to the limit for the deduction of interest expenses provided for in subparagraph a, numeral 2, of subsection a) of the article 37° of the LIR for companies in the financial and insurance system indicated in article 16 of Law No. 26702 only applies to those factoring companies that are under the scope of said law. In this way, companies not included in the scope of Law No. 26702 are excluded, even though they are required to register in the Factoring Companies Registry.
Amortization of development expenses.- Through Report No. 174-2019-SUNAT / 7T0000 it is established that the amortization of development expenses in more than one taxable year must be carried out by the linear method taking into account the maximum period of three (03) years provided for in the second paragraph of article 75° of the General Mining Law.
Review of prescribed periods (Cassation No.3297-2016).- The Permanent Constitutional and Social Law Court has established that the Tax Administration is empowered to correct errors from previous periods, even if they are prescribed, not in order to determine and collect tax obligations derived from them which could infringe the prescription; but, so that the amount obtained from the tax to be paid for a period not prescribed reflects the correct amount of the obligation.
Road maintenance expenses (RTF N° 3244-9-2019).- The Tax Administration objected the tax credit linked to road maintenance expenses since they were not linked to the taxpayer’s activity. In this regard, the Tax Court revoked the objection stating that these expenses do comply with the Causality Principle, as they are incurred in order that income generating activities are carried out regularly and guaranteeing their continuity, since If the road is in poor condition, it would be difficult to transfer the goods that it acquires, the personnel that works and the products that it commercializes, among others, which would prevent the normal development of the taxpayer’s business, that is, the expenses for maintenance of roads are indispensable.
Deduction of financial expenses (RTF N° 4373-9-2018).- The Tax Administration objected interest expenses on loans incurred by the taxpayer to purchase two lands, since the purchase of one of them was not made. The Tax Court affirmed that for the deduction of financial expenses for the purchase of the land, it is not necessary that they generate income, but that they are potentially suitable to produce them; and since SUNAT had not distorted this circumstance, the Court concluded that the objection was not properly supported and proceeded to lift it.
