A new ruling from the Peruvian Tax Authority dictates that the list of services established in the Income Tax Law Regulations that could be considered digital services will always qualify as digital services even though they do not comply with certain other requirements established by law.

Background

Peruvian legislation establishes that revenues from digital services are deemed as Peruvian-source income taxed at a 30% withholding tax rate when they are economically used or consumed in Peru and regardless of where they are provided (within Peru or abroad).

In this regard, the Peruvian Income Tax Law Regulations define digital services as any service that is (i) made available to the user through the internet, platforms or technology used by the internet and (ii) characterized by being essentially automatic (minimal human participation) and not viable in the absence of the internet. If at least one of these characteristics is absent, the service is not considered digital.

In addition, the regulations also establish a non-exhaustive list of services that could be considered digital services, such as: software maintenance, technical support on a network, data warehousing, application hosting, application service provision, website hosting, online consulting, banner ads, online tenders, information distribution, access to an interactive webpage, interactive training and online portals for sale and purchase.

Notwithstanding the above, various pronouncements by the Peruvian Tax Court and the Judiciary have established that the inclusion of a service on the non-exhaustive list does not automatically grant the qualification of a digital service. Rather, the service must be analyzed to determine whether it has all the characteristics of a digital service and thus be deemed as digital.

Peruvian Tax Authority Ruling 000039–2024

On 14 June 2024, Peruvian Tax Authority issued the Ruling 000039–2024 establishing that the following services are considered to be digital services even if they do not comply with the prescribed digital services requirements: online consulting, technical support on a network, software maintenance, data warehousing, application hosting, application service provision, website hosting, banner ads, online tenders, information distribution, access to an interactive webpage, interactive training and online portals for sale and purchase.

Consequently, the Peruvian Tax Authority interprets the Regulations as establishing that because the services included in the non-exhaustive list "are considered as digital services, among others," the listed services should be deemed as digital services even if they do not meet the prescribed requirements to be considered as digital services. Thus, the Peruvian Tax Authority appears to conclude that the following will always qualify as digital services: software maintenance, technical support on a network, data warehousing, application hosting, application service provision, website hosting, online consulting, banner ads, online tenders, information distribution, access to an interactive webpage, interactive training and online portals for sale and purchase.

It is important to note that prior decisions by the Peruvian Tax Court and Judiciary concluded that the inclusion of a service on the non-exhaustive list does not automatically mean it qualifies as a digital service, but rather must be analyzed to determine whether it meets all the characteristics of a digital service. Nonetheless, this ruling from the Peruvian Tax Administration is mandatory and, thus, its application to taxpayers will likely be discussed in the Peruvian Tax Court and other courts in the Judiciary.