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September 17, 2018
2018-1829

Peru enacts provisions with regard to the General Anti-Avoidance Rule

Once regulations are issued, Peru's GAAR will apply from July 19, 2012 and thereafter. Taxpayers should review their tax plans to ensure they comply with the GAAR.

On September 13, 2018, Peru's president enacted Legislative Decree 1422, which establishes provisions with regard to the Peruvian General Anti-Avoidance Rule (GAAR) for tax purposes.

Peruvian GAAR was enacted on July 19, 2012, but was suspended until regulations are issued through a Supreme Decree.

Legislative Decree 1422 establishes that:

  • The GAAR will apply for tax audits reviewing facts, acts and situations from July 19, 2012 and thereafter
  • Legal representatives will be jointly liable for the tax debt when the GAAR is applied, provided those legal representatives have collaborated with the design or implementation of the acts challenged by the Peruvian Tax Authority using the GAAR
  • Boards of directors (for entities having a board of directors) will be responsible for approving the entity's tax planning and cannot delegate this obligation
  • The board of directors must evaluate the tax planning implemented up to September 14, 2018, in order to ratify or modify the plan (the period for ratifying or modifying the tax plan will end on March 29, 2019)
  • The Peruvian Tax Authority, to apply the GAAR in tax audits, must follow a special procedure that requires the auditor to send the case to the Revision Committee, which will notify the taxpayer of a hearing
  • The Revision Committee's opinion is issued within 30 days after the hearing, and is binding for the Peruvian Tax Authority and taxpayer

Legislative Decree 1422 went into effect on September 14, 2018.

Contact Information
For additional information concerning this Alert, please contact:
 
Ernst & Young Asesores S.C.R.L, Lima
• Roberto Cores+51 1 4114448;
• Ramón Bueno-Tizón+51 1 4117233;
Latin American Business Center, New York
• Ana Mingramm(212) 773-9190;
• Enrique Perez Grovas(212) 773-1594;
• Pablo Wejcman(212) 773-5129;
 

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