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Peru Delegates Temporary Powers to the Executive to Legislate on Certain Tax Matters — Orbitax Tax News & Alerts

Peru published Law No. 31380 in the Official Gazette on 26 December 2021, which provides for the delegation of powers to the executive branch for 90 days to legislate on certain tax, financial, and economic reactivation matters. As previously reported, the government submitted a bill in October requesting the delegation of powers for several tax reforms. As approved and published, the final law is more limited in scope than originally requested and provides for the delegation of the following tax and fiscal measures, among others:

  • Modify the Income Tax Law and other rules that regulate Income Tax to:
    • introduce tax regulations on the non-deductibility of expenditures related to behaviors classified as crimes, such as the crime of bribery, in all its forms, in accordance with the recommendations made by the OECD and the UN;
    • modify the presumed net income (rates) for non-residents' Peru-source income to include the extraction and sale of "hydrobiological" resources, such as fish (original request was to increase rates for all types of presumed net income);
    • regulate the income tax treatment applicable to joint venture contracts;
    • establish a new valuation method that reasonably approximates the market value in the transfer of transferable securities and, regarding the regulation of the sixth method, modify the related communication deadlines and simplify the requirements overall;
    • standardize the cost for access to Legal Stability Agreements, without implying an increase in the applicable rate of 2 additional percentage points to the Income Tax currently applied to companies in the mining sector;
  • Modify the Law on General Sales Tax and Selective Consumption Tax in order to:
    • extend the validity of the exemption from the General Sales Tax to the operations contained in Appendix I and II of the law for a period of one year, which includes the sale and import of various goods, the first sale of certain housing property by constructors, certain transport and related services, certain live shows and performances, university dining services, insurance, and others; and
    • simplify compliance obligations; and
  • Extend the accelerated depreciation regime for the agriculture sector to cover the aquaculture, forestry, and wildlife sectors.

Note, legislative decrees must be issued for the implementation of the various measures under the delegated powers. Further details will be published once available.