On 7 February 2019, the Peruvian Tax Authority published a report (097-2018-SUNAT / 7T00000) clarifying the passive net income attribution of CFC rules to its Peruvian shareholders. The Ministry of Finance simplifies the following issues in the Report:

  • The net passive income attributable to resident individuals and corporations is the income that, qualifies as foreign-sourced income for Peruvian income tax purposes and Peruvian-sourced income under specific conditions according to section 9, article 114 of the Income Tax Law; and
  • If a Peruvian taxpayer owns a foreign holding company and that holding company in turn holds another foreign entity and both companies qualify as CFCs under the CFC rules, SUNAT considers that the profits of both CFCs are not sufficiently consolidated to meet the requirements of the Peru-based individuals and businesses. The net passive income must be assessed at the level of each CFC.