Tuesday, 21 March 2017

Peru introduces CbC reporting

Peru’s government published a decree on 31 December 2016 that introduces a requirement to submit a local and a master file, as well as a country-by-country (CbC) report, in accordance with action 13 of the OECD BEPS project. The decree also amends Peru’s income tax law with respect to the use of the  ontrolled comparable price method for transfer pricing purposes and makes it possible to use other methods when it is not possible to apply the methods set
out in the law.
The rules governing the local file apply for fiscal year 2017, but the master file and CbC reporting rules will not apply until fiscal year 2018. The rules on the transfer pricing methods apply as from 1 January 2017.
The local file documentation requirement applies to taxpayers whose annual income for the fiscal year exceeds 2,300 tax units (a tax unit is PEN 4,050 for 2017). The report must include information on transactions that generate taxable
income and/or deductible expenses, although the tax authorities can require the report even for transactions that generate exempt income or nondeductible expenses.
Taxpayers that are part of an economic group whose accrued income during the fiscal year exceeds 20,000 tax units must prepare a master file. The report, which will need to be filed annually, must include information on the organizational structure of the group, a description of the business activities and the transfer pricing policies relating to intangible assets and group financing, as well as the group’s financial and tax positions.
The annual CbC report will be required by taxpayers that are part of a multinational group, and will need to include information on the annual income, taxes paid and business activities of each entity in the group.
The Peruvian tax authorities will be able to share the information contained in the reports with the tax authorities of other jurisdictions that have concluded automatic exchange of information arrangements with Peru.

Source: Deloitte