14 September 2016 Peruvian Tax Authority issues a ruling on the legal personality of branches Branches of foreign entities are separate legal entities for Peruvian tax purposes and are entitled to the same deduction for expenses as Peruvian legal entities. On July 18, 2016, the Peruvian Tax Authority released Notice 127-2016, establishing that, in accordance with the provisions of the Peruvian Income Tax Law, branches, agencies and other permanent establishments of foreign entities established in Peru are considered, for income tax purposes, as different entities from their head offices. In other words, they are separate legal entities for Peruvian tax purposes. Peruvian legal entities may deduct expenses to the extent that they are necessary to produce taxable income or to maintain their source of revenue generation. Accordingly, the Peruvian Tax Authority also determined that these above-mentioned entities may deduct expenses, including those derived from services rendered by their head offices, to the extent that they are necessary to produce taxable income or to maintain their source of revenue generation.
Document ID: 2016-1547 | |||||||||||||||||||||||
