Peruvian tax authorities address merger of nonresident entities with one entity having a PE in Peru

14 October 2020

If two nonresident entities merge and the absorbed entity has a permanent establishment in Peru, the absorbed entity will have to pay tax on the income from the transfer of the permanent establishment. The tax authorities address other tax consequences of the merger in the ruling.

On October 6, 2020, the Peruvian tax authorities published Public Ruling 061-2020-SUNAT/7T0000, addressing the merger of two nonresident entities when the absorbed entity has a permanent establishment (PE) in Peru.

The Peruvian tax authorities ruled the merger will have the following tax consequences in Peru:

The PE of the absorbed entity will not have to obtain a new Tax ID.
The merger of the two nonresident entities will not have tax effects for the PE in Peru.
The absorbed entity will be taxed in Peru on the income from the transfer of the PE because the income qualifies as Peruvian-sourced income.

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Contact Information
For additional information concerning this Alert, please contact:

Ernst & Young Asesores S.C.R.L, Lima
• Roberto Cores (roberto.cores@pe.ey.com)
• Ramón Bueno-Tizón (ramon.bueno-tizon@pe.ey.com)
Latin American Business Center, New York
• Ana Mingramm (ana.mingramm@ey.com)
• Enrique Perez Grovas (enrique.perezgrovas@ey.com)
• Pablo Wejcman (pablo.wejcman@ey.com)

Document ID: 2020-2471