Bill presented to allow Peru’s executive branch power to legislate on tax and reporting matters

The text of the Bill says that its object is to allow the executive branch the power to legislate measures that would strengthen, simplify and improve regulation in the field of both public and private investment. It would also seek to improve fiscal balance and modernise the tax system.

In terms of income tax, the executive branch proposes to modify the rules on expense deductions for directors of public limited companies. It would also create a simplified income tax regime for smaller companies. The general sales tax would be modified to establish a VAT collection mechanism for non-domiciled services in the digital economy, such as Netflix and Spotify.

The country’s fiscal code would be amended to expedite tax collections and make procedures more efficient, for example in attributing joint and several liability and adapting requirements for appealing cases. The federal tax court’s operations would be modified and the scope of cassation rulings by the Supreme Court of Justice would be delimited.

Under the Bill, the executive branch would also seek to legislate on various matters of regulation and compliance. This would include modifying the AEOI regulatory framework to incorporate an anti-avoidance standard, preventing firms from circumventing due-diligence and reporting requirements.

Further, the requirements for non-domiciled legal entities and legal entities incorporated abroad to register on the register of beneficial ownership would be simplified.

Congress must now discuss and approve the Bill before the measures pass into law.

Sources

• Garrigues (Spanish)
• Contadores & Empresas (Spanish)
• Congreso de la República de Peru (Spanish)