The Advance Transfer Pricing Agreements rule is modified so that it can cover previous fiscal years.

Lima, October 4, 2024

On September 24, 2024, Legislative Decree No. 1662 was published in the Official Gazette El Peruano , which modifies the LIR in its article 32-A Section f).

Below are the main changes:

1. Background.

According to Superintendency Resolution No. 244-2017/SUNAT, published in 2017.

For the first time, the transfer pricing regime in Peru establishes the concept of Advance Pricing Agreements (APAs) and the procedure taxpayers must follow to request one.

According to Section I, literal a), numerals 1 and 2 of article 118° of the LIR Regulations.

Advance Pricing Agreements are legally binding agreements between the Tax Administration and taxpayers residing in the country who carry out transactions with related parties or from, to, or through low- or zero-tax countries or territories. The objective is to determine the methodology, and, where applicable, the price or margin, that underpins the various transactions that the taxpayer carries out with related parties or from, to, or through low- or zero-tax countries or territories.

2. Main changes introduced and implications for Companies .

Decree No. 1662 expands SUNAT’s ability to enter into agreements not only with taxpayers domiciled in Peru, but also with tax authorities of other countries that have signed a Double Taxation Agreement (DTA) with Peru [1] . This amendment allows the agreements to take effect on transactions from prior tax years, provided that:

• The relevant circumstances and facts are consistent with those of the years covered by the agreement.
• SUNAT has not lost the ability to determine tax obligations due to prescription.

It is also important to note that this provision does not apply if a determination resolution has already been issued regarding the valuation of the transactions in question.

This decree represents a valuable opportunity for companies operating abroad. The possibility of retroactively adjusting agreed prices can mean a reduction in the tax burden and greater certainty in compliance with tax regulations.

3. Validity of the rule .

It comes into force on January 1, 2025 .

4. Recommendations .

Evaluate current and past transactions that have been carried out abroad:

It is important for companies to analyze transactions within their economic group, especially those with countries with which Peru has signed a Double Taxation Agreement.

Kind regards,

TP Consulting Peru