On 9 October 2019, the Peruvian Tax Administration (SUNAT) has published Report No. 130-2019-SUNAT/7T0000 (guiedeline) on its website regarding deductibility of interest paid to non-residents. The deduction of interest on debts provided is prescribed in sub-section a.4) of Article 37 the Income Tax Law.
The guidelines explain that, according to Article 57 of the Law, interest and other financial expenses are deductible if they are necessary to obtain income of the third category income or to maintain the source of revenue.
Accordingly, taxpayers will be able to deduct royalties and payments for services made to non-residents in the tax year in which the payment is effectively made to the non-resident, regardless of whether the royalty or the service payment was recognized in a different tax year. The taxpayer will be entitled to deduct the interest only during the fiscal year in which the interest is effectively paid to the non-resident.
