April 4, 2022
Peruís President amends silent partnership rules
The legislative decree modifies the tax treatment of silent partnerships. Specifically, the legislative decree establishes that income distributed to the silent partner will be considered dividends and dividends distributed to nonresident silent partners will be considered Peruvian-source income, subject to 5% withholding.
On 26 March 2022, Peru’s President enacted Legislative Decree 1541, amending the Income Tax Law to modify the silent partnership rules.
On 2 April 2021, the Peruvian Tax Court published, in the Official Gazette, Resolution 02398-11-2021, which established that income distributed to a silent partner should be treated as dividends. The Resolution is mandatory, which means the Peruvian tax authority must follow it. For information on this issue, see EY Global Tax Alert, Peruvian Tax Court concludes income received by a silent partner in a silent partnership will be treated as dividends, dated 7 April 2021.
On 27 October 2021 Peru’s President asked Congress for the power to enact tax measures. On 27 December 2021, the Congress approved the President’s request to enact different tax measures, including modifications to the silent partnership rules. For information on the approval of the President’s request to enact certain tax measures, see EY Global Tax Alert, Peru enacts law allowing the President to enact various tax measures, dated 4 January 2022.
Legislative Decree 1541
Legislative Decree 1541 establishes the following tax treatment for silent partnerships:
The Resolution is effective 1 January 2023.
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