Peru enacts major tax reform

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September 2018


The Peruvian government issued several Legislative Decrees on September 13 that modify the Tax Code and Income Tax Law. Below are some of the most important modifications to the tax regime:

  • Any indirect transfer of shares over US $50 million will be taxed. New rules will apply to calculate the value and the 50% test.
  • A permanent establishment definition was incorporated to the Peruvian Income Tax Law.
  • A limitation on the deductibility of interest expense applying a percentage of EBITDA limitation in the 30% range will be effective on January 1, 2021.

The Law once again includes rules for applying the general anti-avoidance rule (Provision XVI). This provision had been suspended in the past.

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