On 12 May 2021, the Peruvian Tax Administration (SUNAT) has issued Report No. 015-2021-SUNAT / 7T000 (the Guideline)regarding various queries related to the application of the limit for the deduction of interest expenses are answered, referred to in the Income Tax Law, in the case of taxpayers who have just been constituted or who are in the pre-operational stage.
The Guideline includes the following measures:
- Taxpayers whose net income in the taxable year does not exceed 2,500 tax units (UIT) are not subject to the limit of interest deduction (30% EBITDA), is also applicable to the taxpayers that are constituted or start activities in the year;
- In the case of interest expenses incurred in the pre-operational stage, it is not relevant to verify whether or not in said pre-operational stage the income exceeded 2,500 UIT. The important thing is to verify if the said amount is exceeded in the year in which said expenses will be recognized for deduction purposes. To deduct the interest expense in a single year, the deduction limit will not be applicable if, in the year in which the production or exploitation of activities begins, the company’s income does not exceed 2,500 UIT. To amortize them proportionally up to 10 years, to determine if the deduction limit is applied or not, it must be verified if each year the income exceeds 2,500 UIT. In these cases, the comparison of the net interest with 30% of the EBITDA to determine the deduction limit, must consider the interest to be deducted in said year; and
- In the event that a legal entity is constituted in 2021 and begins activities in 2022, the EBITDA to be considered as a reference for the deduction limit will be that of the fiscal year 2022.
