June 26, 2018 Peruvian Congress grants President power to legislate in tax matters Taxpayers should continue to monitor the release of any tax guidance in the coming months. On 19 May 2018, the Peruvian Congress granted the President the power to legislate in tax matters. Among other things, the President has 60 calendar days to: 1. Issue regulations on the general anti-avoidance rule, which is currently suspended until the regulations are published 2. Modify the Tax Code to expand the cases of joint liability of legal representatives by applying the general anti-avoidance rule 3. Issue specific anti-avoidance rules on transactions between related and unrelated parties 4. Establish a special income tax rate for dividends from companies with legal stability contracts signed during 2015 or 2016 5. Modify withholding tax rates for capital income and income from independent personal services 6. Modify the criteria to consider legal entities domiciled in Peru 7. Modify the income tax rates applicable to income from activities developed partly in the country and partly abroad 8. Regulate the exchange rate applicable to transactions performed by domiciled individuals and non-domiciled persons 9. Improve the tax treatment applicable to capital gains from the indirect sale of shares, as well as the criteria to determine when a foreign company will pay income tax 10. Define accrual recognition for income tax purposes 11. Modify the deduction of business expenses (rules on depreciation and amortization, interest, expenses for the acquisition of vehicles, penalties and indemnities) 12. Amend the Value Added Tax to improve its administration 13. Modify the Criminal Tax Law 14. Adapt national legislation to international standards and recommendations issued by the Organisation for Economic Cooperation and Development (OECD), the Financial Action Task Force and international best practices for the fight against tax avoidance and evasion 15. Implement mechanisms of transparency on ultimate beneficial ownership 16. Implement the OECD's Common Reporting Standard in Peru 17. Incorporate the indirect credit and modify direct credit rules in Peruvian local tax legislation 18. Limit secrecy in banking transactions ———————————————
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