Peruvian executive power will modify tax on nonresident entities’ presumed income

By Gonzalo Escalante, Tax partner, Zegarra Aguilar Abogados, and Tax Law lecturer, Universidad Católica San Pablo

On December 17, the Peruvian Congress approved the legislative project (583/2021-PE) presented by the executive power to be allowed to legislate on tax matters to modify rules applicable to the presumed income of nonresident entities.

The approval of the legislative project includes several changes from the text that was presented by the executive power.

Under the approved law, the executive power will have the faculty to modify the presumed net income applicable to nonresident entities and their branches or other permanent establishments to include the extraction and sale of “hydro-biological” resources, such as tuna, among the activities subject to the presumed income provisions.

The passed law does not grant the broader powers sought by the executive power to increase the presumed net income taxable in Peru applicable to other sources.

For the changes to come into force in 2022, the executive power would have to enact the corresponding legislative decree before the end of the current year.

—Gonzalo Escalante is a Tax partner at Zegarra Aguilar Abogados and a Tax Law lecturer at Universidad Católica San Pablo.