On 4 February 2025, the Peruvian Supreme Court, the highest authority on tax conflict resolution in Peru, published Resolution 2705—02024-LIMA, concluding that consulting services provided via email only qualify as digital services if they are automatic and provided through digital means.

Background

Digital services fees are subject to a 30% withholding tax in Peru (unless reduced by a Double Tax Treaty) if the services are economically used or consumed in Peru, regardless of whether they are provided within the country or abroad.

Peruvian Corporate Income Tax legislation defines digital services as any service that is made available to the user through the internet, platforms or technology used by the internet, characterized by being essentially automatic (with minimal human participation) and not viable without the internet. If at least one of these characteristics is absent, the service is not considered digital. Additionally, the regulations provide a non-exhaustive list of services that could qualify as digital, such as online consulting.

In June 2024 Peruvian Tax Authority issued Ruling 000039—2024-SUNAT/7T0000¹ establishing that certain services — online consulting and technical support — should be considered digital services, even if they do not meet all the prescribed criteria (i.e., even if they are not essentially automatic). The Peruvian Tax Authority's interpretation hinges on the contention that services listed in the non-exhaustive list should automatically be treated as digital services, even if some defining characteristics are missing (i.e., automation and reliance on digital means).

Peruvian Supreme Court's confirmed criterion

Despite the Peruvian Tax Authority's position in Ruling 000039—2024, the Peruvian Supreme Court has now reaffirmed its stance in a Resolution. According to the Supreme Court, consulting services provided via email qualify as digital services only if they are automatic and provided through digital means; the inclusion of "consulting services" on the non-exhaustive list provided in the Peruvian Income Tax Law Regulations is immaterial to this result.

In essence, the Supreme Court emphasizes that the Peruvian Income Tax Law and its Regulations define "digital services" as income from Peruvian sources, listing categories of services such as electronic access to consulting services. However, for a service to qualify as a digital service, the service must be essentially automatic and principally dependent on technology.

The key point of divergence between the Peruvian Tax Authority and the Peruvian Supreme Court (as well as the Peruvian Tax Court) lies in their interpretation of the Peruvian Income Tax Law Regulations. The Tax Authority believes that services listed in the non-exhaustive list are digital services simply because they are included on the list, whereas the Supreme Court and most of the Peruvian tax community contend that a service qualifies as a digital service only if it meets the additional criteria — namely, being automatic and provided by digital means.

Implications

Entities affected by the Court's decision should consult with their tax advisors to help analyze their specific case on an individual basis to determine the most appropriate course of action, which would typically include preparing a defense file.²