On 16 May 2019, Peruvian tax administration published a guidance “Informe No. 057-2019-SUNAT/7T0000” outlining the tax treatment of transfers of undervalued Peruvian entity shares involving foreign related parties.
Under this any transfer pricing adjustment in the transfer of shares of a Peruvian company involving a party affiliated with foreign countries would affect both the acquirer and the issuer if less Peruvian Income taxes or more allowable deductions or costs are incurred under Peruvian income tax laws. The guidance concludes that for such undervalued transfers, the cost of the acquirer’s shares should be equal to the acquisition price plus any transfer pricing adjustment.
