Peru: local rules

Peru applies the arm's length principle through item 4 of art. 32 and art. 32-A of the Income Tax Law (LIR, TUO approved by DS 179-2004-EF) and Chapter XIX of its Regulation (DS 122-94-EF, arts. 108 to 119). The rules cover transactions with related parties, transactions made from, to or through low or no tax or non-cooperative jurisdictions, and transactions with persons under a preferential tax regime. Parties are related mainly by more than 30% of capital, common directors, consolidated accounts or dominant influence (Regulation art. 24). SUNAT can adjust a price only if it gives less Peruvian tax, or if the change gives more Peruvian tax on dealings with other related parties (art. 32-A(c)). The OECD Transfer Pricing Guidelines are used to interpret the article if they do not conflict with the law (art. 32-A(h)). Services from related parties are deductible only if the taxpayer passes the benefit test and gives the requested support (art. 32-A(i)).

There are three annual information returns filed on SUNAT systems. The Local Report (Form 3560) is due from taxpayers with income above 2,300 UIT and related party transactions of at least 100 UIT. The simple version applies below 400 UIT, and the full version with the transfer pricing analysis applies from 400 UIT, or for any sale of goods below cost (RS 014-2018/SUNAT art. 2). The Master Report (Form 3561) is due from a group member whose own income in the year is above 20,000 UIT and whose related party transactions are at least 400 UIT (RS 163-2018/SUNAT art. 2). The Country-by-Country Report is due from a Peruvian parent, or a designated or required Peruvian member, when group income in the prior year is S/ 2.7bn or more, and is filed in the IR AEOI system (RS 188-2019/SUNAT). The UIT is the one for the year being reported (Regulation art. 116(a)(7)): S/ 5,150 for 2024, S/ 5,350 for 2025 and S/ 5,500 for 2026. Supporting documents must be kept, with a Spanish translation if needed, for 5 years or the limitation period, whichever is longer (art. 32-A(g)). The old Technical Study duty was replaced by these reports.

The law lists six methods: comparable uncontrolled price, resale price, cost plus, profit split, residual profit split and transactional net margin. The taxpayer must use the one most appropriate to the economic reality of the transaction (art. 32-A(e); Regulation art. 113). Since 1 January 2025 (DL 1663), other methods such as discounted cash flow, multiples, equity value, appraisal or MPEEM can be used if the six methods do not fit, backed by a technical report built on the International Valuation Standards (Regulation art. 113-B, added by DS 302-2025-EF from 18 December 2025). A range is built when there are two or more comparables, using the interquartile method. If the agreed value is inside the range it is accepted. If it is outside the range and gives less Peruvian tax, the market value is the median (Regulation art. 114). Special rules apply to exports and imports of goods with a known market quote: the quote date is the one the taxpayer tells SUNAT on time, or else the end of loading or unloading (art. 32-A(e)(1); Regulation art. 113-A).

Fines are in Tax Code Table I and are often a share of IN, which means net revenue (net sales and other income shown in the prior year's annual return, art. 180(b)), not profit. Filing the Local, Master or Country-by-Country Report late is fined 0.6% of IN, with a floor of 10% of one UIT and a cap of 25 UIT (art. 176 item 2, Table I notes 10 and 14). Filing one that is incomplete or untrue carries the same fine (art. 176 item 4). Not producing the transfer pricing documents SUNAT asks for is also fined 0.6% of IN with the same limits (art. 177 item 27). Declaring false data that lowers the tax carries a fine of 50% of the tax omitted (art. 178 item 1), and a late annual return is fined 1 UIT (art. 176 item 1). SUNAT can assess for 4 years, or 6 years if no return was filed (art. 43). Fines can be reduced under SUNAT's gradual penalty rules (art. 166), which were not reviewed.

Peru has not adopted Pillar Two. No income inclusion rule, undertaxed profits rule or domestic minimum top-up tax was found in the Income Tax Law, its Regulation or any SUNAT rule, and no GloBE return, registration or top-up tax deadline exists. The general corporate tax rate is 29.5% (LIR art. 55). Peruvian subsidiaries of groups with revenue of EUR 750m or more may still be affected by the rules of the parent's country.

The annual corporate income tax return (Form 710) for the calendar year is due in March and April, by the last digit of the RUC (the tax number). Micro and small businesses (MYPE) with income up to 1,700 UIT get May and June dates under Law 31940, but not a MYPE that is part of a group where one member controls another, so group members normally use the March and April dates. SUNAT publishes each year's schedule in late December. SUNAT can sign advance pricing agreements with Peruvian taxpayers and with treaty partners (art. 32-A(f), changed by DL 1662 from 1 January 2025). A taxpayer with an APA files the annual APA report on the same date as the Local Report (RS 377-2013/SUNAT art. 18.1, as changed by RS 014-2018). A Peruvian member of a multinational group that is a designated or required CbC filer must tell SUNAT who files, by the last working day of the month before the filing month (RS 163-2018 art. 10.2).