Peru published the Legislative Decree No. 1369 (the Decree) on 2 August 2018 in the Official Gazette. The degree amends the transfer pricing provision of the Income Tax Law in order to be aligned with the BEPS project. The main amendments to the transfer pricing provision are as follows:
- Rules regarding the “profit test” (test del beneficio) and intra-group services have been narrowed to cover only related party transactions within the scope of transfer pricing rules
- It is clarified that expenses incurred regarding “low-value-added services” will be equivalent to the sum of the costs and expenses incurred in the provision of such services, plus a maximum amount of 5% of such costs and expenses
The Decree will enter into force on 1 January 2019.
