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18 September 2018

Peru enacts provisions with regard to the General Anti-Avoidance Rule

On 13 September 2018, Peru's President enacted Legislative Decree 1422, which establishes provisions with regard to the Peruvian General Anti-Avoidance Rule (GAAR) for tax purposes.

Peruvian GAAR was enacted on 19 July 2012, but was suspended until regulations are issued through a Supreme Decree.

Legislative Decree 1422 establishes that:

  • The GAAR will apply for tax audits reviewing facts, acts and situations from 19 July 2012 and thereafter
  • Legal representatives will be jointly liable for the tax debt when the GAAR is applied, provided those legal representatives have collaborated with the design or implementation of the acts challenged by the Peruvian Tax Authority using the GAAR
  • Boards of directors (for entities having a board of directors) will be responsible for approving the entity's tax planning and cannot delegate this obligation
  • The board of directors must evaluate the tax planning implemented up to 14 September 2018, in order to ratify or modify the plan (the period for ratifying or modifying the tax plan will end on 29 March 2019)
  • The Peruvian Tax Authority, to apply the GAAR in tax audits, must follow a special procedure that requires the auditor to send the case to the Revision Committee, which will notify the taxpayer of a hearing
  • The Revision Committee's opinion is issued within 30 days after the hearing, and is binding for the Peruvian Tax Authority and taxpayer

Legislative Decree 1422 went into effect on 14 September 2018.

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CONTACTS

For additional information with respect to this Alert, please contact the following:

Ernst & Young Asesores S.C.R.L, Lima

  • Roberto Cores
    roberto.cores@pe.ey.com
  • Ramón Bueno-Tizón
    ramon.bueno-tizon@pe.ey.com

Ernst & Young, LLP, Latin American Business Center, New York

  • Ana Mingramm
    ana.mingramm@ey.com
  • Enrique Perez Grovas
    enrique.perezgrovas@ey.com
  • Pablo Wejcman
    pablo.wejcman@ey.com

Ernst & Young LLP (United Kingdom), Latin American Business Center, London

  • Jose Padilla
    jpadilla@uk.ey.com

Ernst & Young Tax Co., Latin America Tax Desk, Japan & Asia Pacific

  • Raul Moreno, Tokyo
    raul.moreno@jp.ey.com
  • Luis Coronado, Singapore
    luis.coronado@sg.ey.com

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ATTACHMENT

PDF version of this Tax Alert

Document ID: 2018-6090

 
 

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