Under a new law, the President is entitled to issue Legislative Decrees to enact certain tax measures, including the creation of a mechanism to collect the value-added tax (VAT) from digital operations and amendments to the Online Gaming and Online Sports Betting Tax Law.

Background

On 5 May 2024, Peru's President asked Congress for the power to enact different tax measures. As a result, on 4 July 2024, the Congress enacted Law 32089, delegating some specific legislative faculties to the President.

Law 32089

Law 32089 allows the President, for a maximum term of 90 calendar days, to enact various tax measures. Specifically, the new law entitles the President to enact Legislative Decrees regulating the following topics, among others.

Income Tax Law

The new law allows the President to:

• Establish that individuals who obtain income from indirect transfer of Peruvian shares not subject to withholding will be required to make monthly advanced payments.
• Amend the Advance Pricing Agreement (APA) dispositions to be in accordance with the minimum standard of the Base Erosion and Profit Shifting (BEPS) Action 14 (Dispute Resolution Mechanisms).
• Amend the dispositions on other methods of valuation for operations where transfer pricing rules apply.

VAT and Excise Tax

The President may also:

• Create a mechanism to collect VAT on digital operations and amend the corresponding legislation in this matter, in accordance with the OECD recommendations.
• Rule on different aspects of the Purchase Registry.
• Include online gaming and online sports betting within the scope of application of Excise Tax.

Online Gaming and Online Sports Betting Law

The new law allows the President to amend the Online Gaming and Online Sports Betting Tax Law to clarify the following aspects of the rules applicable to taxpayers:

• The limitation of welcome bonuses or similar granted by providers of these type of services to their clients
• Use of official accounting rules for the determination of the taxable base
• Determination of foreign exchange and time zone rules applicable
• Creation of a tax collection mechanism
• The establishment of tax rules on nonresident operators
• For nonresident providers of these services, rule on certain aspects related to obtaining Peruvian Tax ID, tax payment, compliance of formal obligations and notifications of administrative acts via electronic methods

Other tax measures

Further, the President will be able to:

• Establish the obligation of all entities of the Executive to apply the methodology for determining the costs of administrative procedures and services rendered on an exclusive basis
• Modify the composition of the Peruvian Tax Court
• Simplify the registration requirements in the Peruvian Tax ID Registry of nonresident entities that are obliged to file the Ultimate Beneficial Owner (UBO) return, when they count with a branch, agency or other permanent establishment in Peru
• Approve a special installment payment for debts administered by the Peruvian Tax Authority that constitute public treasury revenues due until 31 December 2023