Legislative Decree 1529 does not include any reference to the obligation to use the Peruvian banking system for payments made to acquire Peruvian shares indirectly from January 1, 2012 and March 31, 2022.

Though recently issued Legislative Decree 1529 clarified that taxpayers do not have to use the Peruvian banking system for payments made for direct or indirect transfers of shares on or after April 1, 2022, it did not clarify whether taxpayers must use the Peruvian banking system for payments made for indirect transfers of shares from January 1, 2012 to March 31, 2022. As a result, uncertainty remains as to whether the Peruvian tax authority will certify the tax basis of Peruvian shares acquired indirectly during that time if the taxpayer did not use the Peruvian banking system to pay for those shares.

Background

In Ruling 4-2022-SUNAT/7T0000 (issued January 10, 2022), the Peruvian tax authority established guidelines for when taxpayers must use the Peruvian banking system to pay for indirect transfers of shares.¹ Under the ruling, a taxpayer that acquired Peruvian shares indirectly before 2012, does not have to prove it used the Peruvian banking system to pay for the shares.

Ruling 4-2022-SUNAT/7T0000, however, did not address whether taxpayers that made payments after January 1, 2012, for indirect transfers of Peruvian shares had to use the Peruvian banking system for their tax basis to be recognized. (See Tax Alert 2022-0177).

The Peruvian tax authority adopted the position of requesting payment through the Peruvian banking system to certify the tax basis in both indirect and direct transfers of Peruvian shares. The tax authority's position has led to situations in which the tax authority rejects the tax basis because the taxpayer did not use the Peruvian banking system to make payments for direct and indirect share transfers.

Payments to nonresidents for direct and indirect transfers of Peruvian shares

On March 3, 2022, Peru's President enacted Legislative Decree 1529, amending Law 28194, which regulates the use of the Peruvian banking system for tax purposes. The decree clarified that payments for direct and indirect transfers of Peruvian shares do not need to go through the Peruvian banking system, beginning April 1, 2022; rather those payments may be made through foreign banking/financial entities. (See Tax Alert 2022-0384).

Legislative Decree 1529, however, does not include any reference to acquisitions made from January 1, 2012 to March 31, 2022. Given the lack of guidance for that period, it is unclear whether the tax authority will certify the tax basis of Peruvian shares indirectly purchased on or before March 31, 2022, if the taxpayer did not use the Peruvian banking system to pay for the shares.

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ENDNOTE

¹ An indirect transfer of Peruvian shares is deemed to occur when a non-Peruvian entity sells shares issued by a Peruvian company.