globaltaxnews.ey.comSign up for tax alert emailsPrintDownload

27 January 2022

Peru’s President modifies rules for enacting tax exemptions and tax benefits

The decree sets forth requirements a bill must satisfy if it is proposing new tax exemptions or tax benefits.

On 22 January 2022, Peru’s President enacted Legislative Decree 1521, which modifies the Peruvian Tax Code rules for enacting tax exemptions and tax benefits. For information on the approval of the President’s request to enact these tax measures, see EY Global Tax Alert, Peru enacts law allowing the President to enact various tax measures, dated 4 January 2022.

Legislative Decree 1521

Legislative Decree 1521 requires bills modifying tax exemptions and tax benefits to include the purpose and scope of the proposed tax exemption or benefit. The bill also must include an analysis of its effect on current Peruvian tax legislation and a quantitative analysis of the estimated cost of the proposed tax measure. Additionally, the bill must have a supporting analysis on whether: (i) the proposed tax measure is efficient compared to other public policies; and (ii) the measure will create unfair competition between taxpayers receiving the benefits and those that do not.

In addition, Legislative Decree 1521 requires proposed tax exemptions and tax benefits to align with the Government’s tax policies. Tax exemptions or tax benefits must not apply to excise taxes or any goods or services that damage public health or the environment.

Any bill proposing tax exemptions or tax benefits must include the taxpayers that fall within the scope of the benefit, and establish the criteria used to evaluate the impact of the tax benefit and the length of the tax exemption or tax benefit. Tax exemptions or tax benefits may not exceed three years. If the bill does not include a period for the exemption or benefit, the period will be three years.

For Congress to evaluate and approve a bill that would establish new tax exemptions or tax benefits, the bill must have a favorable report from the Ministry of Economics and Finances.

Taxpayers that must issue electronic invoices under Peruvian tax legislation may be eligible for tax exemptions or tax benefits. The Peruvian tax authority must publish annually on its website the taxpayers receiving the tax exemption or tax benefits. The taxpayer information published on the website must include the taxpayer’s name, tax ID, economic activity, and amount of the exemption or benefit, among other things.

Legislative Decree 1521 is effective 23 January 2022.

_________________________________________

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

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

Ernst & Young LLP (United States), Latin American Business Center, New York

Ernst & Young Abogados, Latin America Business Center, Madrid

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

Ernst & Young Tax Co., Latin American Business Center, Japan & Asia Pacific

Document ID: 2022-5099

 
 

The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting or tax advice or opinion provided by Ernst & Young LLP to the reader. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader's specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. The reader should contact his or her Ernst & Young LLP or other tax professional prior to taking any action based upon this information. Ernst & Young LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.

 

Copyright © 2024, Ernst & Young LLP.

 

All rights reserved. No part of this document may be reproduced, retransmitted or otherwise redistributed in any form or by any means, electronic or mechanical, including by photocopying, facsimile transmission, recording, rekeying, or using any information storage and retrieval system, without written permission from Ernst & Young LLP.

 

Any U.S. tax advice contained herein was not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions.

 

"EY" refers to the global organisation, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.

 

Privacy  |  Cookies  |  BCR  |  Legal  |  Global Code of Conduct Opt out of all email from EY Global Limited.

 


Cookie Settings

This site uses cookies to provide you with a personalized browsing experience and allows us to understand more about you. More information on the cookies we use can be found here. By clicking 'Yes, I accept' you agree and consent to our use of cookies. More information on what these cookies are and how we use them, including how you can manage them, is outlined in our Privacy Notice. Please note that your decision to decline the use of cookies is limited to this site only, and not in relation to other EY sites or ey.com. Please refer to the privacy notice/policy on these sites for more information.


Yes, I accept         Find out more