Sign up for tax alert emails    GTNU homepage    Tax newsroom    Email document    Print document    Download document

March 16, 2022

Peruvian Tax Court concludes loan proceeds qualify as a payment of services

The Tax Court determined that proceeds from an interest-free loan are a payment for services because there was no intention to repay the loan and the parties agreed that the funds could be used to pay for services rendered in 2013 and services to be rendered in 2014.

In Resolution 03052-5-2020, the Peruvian Tax Court concluded that funds from an interest-free loan are a payment for services.


A Peruvian entity provided services to an unrelated Peruvian consortium for the production of asphalt concrete used in roadway construction. It also provided transportation services and leased construction machinery to the consortium during tax years 2012 and 2013. The services were subject to value-added tax (VAT) because they were rendered in Peru. At the time the Tax Court considered the case, the consortium had not paid for the services provided in 2013.

In 2014, the Peruvian Consortium and the Peruvian entity entered into an interest-free loan agreement. According to the loan agreement, the payment for the services performed in 2013 was going to be offset with the loan funds.

Resolution 03052-5-2020

The Peruvian Tax Court concluded that the funds received by the Peruvian entity from the consortium under the loan agreement are payment for services rendered in 2013 and advance payments for the services to be rendered in 2014. The Tax Court also determined that the services are subject to VAT.

The court found that the services were subject to VAT because (1) the consortium and the entity agreed that the proceeds would offset the payment due for 2013 and payments for services to be rendered in 2014; (2) there was no intention to pay the loan; and (3) the loan was intended to avoid VAT in violation of the Peruvian general anti-avoidance rules.


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


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 Please refer to the privacy notice/policy on these sites for more information.

Yes, I accept         Find out more