Peru - Summary of income tax law changes (2013) 

The provisions were included in a decree (Decreto Supremo Nº 258-2012-EF) that was implemented by means of prior legislative decrees (published in the summer of 2012).

Foreign tax credits, CFCs

The new measures address the availability of foreign tax credits in Peru. For instance, foreign tax credits generally are not available in Peru for the foreign taxes are paid on certain dividends and other profit distributions.

There are new CFC measures concerning passive income attributable to controlled entities not domiciled in Peru, but in a country with a tax-favorable regime (e.g., a tax haven jurisdiction).

Other provisions

Other changes to Peru’s income tax law are provisions concerning:

• Related parties of foundations and nonprofit associations – Income of foundations and non-profit organizations is exempt from income tax to the extent that the income is derived for the organization’s intended purpose and is not directly or indirectly distributed among its associated entities or persons. The new rules clarify that for this exemption, the amounts cannot be distributed to parties related to the organization or its associates.
• Cost of goods acquired free-of-charge by individuals – With respect to real estate, stocks, and securities acquired by individuals at “no charge,” the cost basis is zero, or alternatively a basis that corresponds to the transferor’s basis prior to the transfer. The new measures address how to establish the transferor’s basis.
• Other expenses treated as dividends – New measures concern the tax treatment of passive income earned by certain non-resident individuals.
• Market value concerning sales of securities – The rules for determining the market value with respect to the sale of securities is the greater of certain amounts—e.g., transaction value and market value. The new measures define these terms.
• Deductible expenses related to vehicles – The new measures address how to determining the value of vehicles for purposes of determining deductible expenses.
• Expenditure on research and technological innovation – Under the new measures, provisions set forth how to determine what qualifies as scientific research and technological innovation.
• Taxation of payments for construction companies – Peru’s tax law provided three methods for imputing the gross income of construction companies—the method for amounts collected, the method for amounts received, and the income deferral method. In mid-2012, the third method (deferred income) was repealed. The new measures address the first method of allocating gross income (amounts received method), and what is meant by the concept of gross profit percentage and budgeted cost.
• Recovery of capital invested with non-domiciled taxpayers – The new provisions concern the rules with respect to redemptions of investments in mutual funds (securities), or the withdrawal of pension contributions.

Read a December 2012 report (Spanish) [PDF 47 KB] prepared by the KPMG member firm in Peru: Modifican el reglamento de la ley del Impuesto a la Renta mediante el Decreto Supremo No. 258-2012-EF

For more information, contact a tax professional with KPMG in Peru:

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