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Tax Newsletter – October 2022

TAX NEWSLETTER

REGULATIONS OF INTEREST 

 

The Regulations of the Income Tax Law (LIR) are amended regarding the justification of capital gains.- Supreme Decree Nº 233-2022-EF, published on October 6, 2022, introduces amendments to Article 60-A of the LIR Regulations and establishes that money loans only justify the referred increases when:

(i) The borrower informs SUNAT that the lender is: a) a resident of a non-cooperating or low or no taxation country or territory or a permanent establishment located or established in such countries or territories; and/or, b) has channeled the loan through banking or financial companies resident in such countries.

ii) The aforementioned communication must be submitted together with the respective supporting documentation, in the form, term and conditions established by SUNAT by means of a Superintendence Resolution.

iii) The referred loans may only justify the capital increases when the lender is fully identified and, among others, does not have the condition of subject without operating capacity, at the time of signing the contract or at the time of making the disbursement of money. The verification of the condition of subject without operating capacity shall be verified the day after the publication made by SUNAT.

iv) These changes come into effect on January 1, 2023.

Maximum amount of Selective Consumption Tax (ISC) refund is determined for those who provide land transportation services.- Through Superintendence Resolution Noº 211-2022/SUNAT, published on October 16, 2022, the percentage to determine the maximum amount of ISC refund referred to in the Regulation of Emergency Decree Nº 012-2019 is adopted:

Month Percentage of

ISC participation

July 2022 8.57%
August 2022 8.89%
September 2022 8.65%

The regulations of Law Nº 31556, which established the special and temporary 8% VAT rate for restaurants, hotels and tourist accommodations, are adopted by Supreme Decree Nº 237-2022-EF, published on October 13, 2022, addopting the following regulations:

(i) The special rate of 8% of IGV shall only be applicable to taxable operations of micro and small companies whose main activity is that of restaurants, hotels and tourist accommodations during the months in which they comply with the requirements established in Law Nº 31556. Operations other than those mentioned above shall be taxed at the general VAT rate (16%).

ii) It is specified that all activities shall be taxed at the MPI rate (2%).

iii) It establishes the procedure to determine the maximum limit of annual sales and the minimum limit of income for the activities taxed at the special rate, as well as the assumptions of loss of this rate and the way in which the configuration of economic group or economic link is determined.

iv) The manner in which the special rate shall be applied for the period September and October 2022 is foreseen.

NATIONAL CURRENT ISSUES

 

SUNAT publishes version 2:0 of the catalog of High Tax Risk Schemes.- In February 2020, SUNAT published – for illustrative purposes – the first version of the catalog of High Tax Risk Schemes including five (05) situations of diverse nature that, potentially, could give rise to the application of Rule XVI of the Preliminary Title of the Single Ordered Text of the Tax Code (General Anti-elusive Clause).

In this second version, eight (08) new tax risk situations are added that could be combated by SUNAT under different legal tools (General Anti-avoidance Clause, Simulation, Transfer Pricing, Lack of Substance, Improper Deductions, among others). The hypothetical operations described are the following:

E6: Concession assignment contract of an extractive industry with disguised payments in a resolved purchase and sale of shares.

E7: Sale and subsequent repurchase of vehicle under the appearance of cancellation of such sale.

 E8: Direct disposal of shares of a Peruvian company disguised as a capital contribution and subsequent capital reduction.

E9: Transfer of benefits to preferential tax regime.

E10: Loan with the appearance of financial leasing.

E11: Intermediation in the sale of minerals through a company without economic substance.

E12: Indirect distribution of income of a non-profit entity under the appearance of payments to a foreign supplier.

E13: Transfers of real estate to the shareholder and its subsequent lease by the latter to the same company (corresponds to the first case in which the SUNAT Review Committee has declared the application of the General Anti-avoidance Clause appropriate).

This catalog is not binding for taxpayers, but it serves as a reference to know the type of operations that SUNAT considers as risky. Taxpayers may demonstrate, in each specific case with the appropriate means of proof, that they have not incurred in such situations and that they have acted in accordance with the legal framework in force, in full exercise of their rights to contractual freedom and lawful tax planning, which is not proscribed by our legal system. 

CASE LAW

 

Interpretation of the concepts of normality and reasonableness of the expense (Cassation Nº 21455-2017 Lima).- The taxpayer assumed expenses for legal defense of trademarks and patents of products that he marketed, but that he did not have registered in his name, in order to maintain a high level of sales in the Peruvian market, considering that the benefit of this expense justifies it and complies with the Principle of Causality provided in Article 37 of the LIR.

In this regard, the Fifth Transitory Constitutional and Social Law Chamber of the Supreme Court states that the criteria of normality and reasonableness of the referred principle have been specified in the Third Transitory Provision of Law Nº 27356 in the following sense: (a) expenses are normal for the activity that generates the taxable income when they are derived from the common exercise of such activity; and (b) expenses are reasonable when there is the conviction that it was advisable to incur them based on the business being carried out and when their amount is justified based on the magnitude of the business. Without limiting such business to a specific period but rather, projecting it to its true extent and future prospects.

Additionally, the Supreme Court established that there are other criteria that the norm does not detail, a fact that confirms the need to interpret with great flexibility the scope of the principle of causality and according to each specific case.

From the analysis of the case, the Chamber concluded that the taxpayer, as a product marketer, was not responsible for the expenses incurred for the aforementioned legal defense, so it may not be considered that such defense is a common act of its business activity for the maintenance of the income producing source and for obtaining taxable income. On the other hand, in the previous instances it was not proven that the taxpayer had any contractual obligation to keep custody of the trademarks and patents of the products it commercializes or to assume legal defense expenses. Therefore, the expenses incurred by the plaintiff company were not normal expenses for the activity that generates the taxable income.

Substantiation of the assessment for withdrawal of goods taxed with the IGV (RTF Nº 5577-4-2021).- The Tax Court establishes that when SUNAT qualifies the delivery of goods as withdrawals taxed with the IGV, it must have previously verified the transfer of ownership of these goods. In addition, it added that this verification may be determined with information obtained from both the distributor and the beneficiary customers; therefore, in the absence of documents or actions of the Administration that prove the transfer, the assessment is not valid and shall be revoked.