Peruvian Tax Court Resolution on Interest-Free Loans Between Related Parties

This resolution addresses a tax dispute between a taxpayer and the Peruvian tax authority (SUNAT) concerning the tax treatment of funds received from non-resident related parties, classified as interest-free loans subject to implied interest under Peruvian transfer pricing regulations. 

Background 

· Audited Period: January to December 2013. 

· Reason for Adjustment: SUNAT determined omissions in withholding income tax on non-residents due to implied interest derived from intercompany loans. 

· Taxpayer’s Position: The funds were not loans, but equity contributions aimed at addressing a negative equity position. 

Court’s Decision 

1. Classification of Funds: 

o Confirmed that the funds qualified as loans, as they were recorded as liabilities in the taxpayer’s accounting records, reflecting an obligation to repay. 

o Rejected the argument that the funds were equity contributions, since the formalization of the capital increase occurred in 2016, outside the audited period. 

2. Application of Transfer Pricing Rules: 

o Supported the application of Article 32-A of the Income Tax Law (transfer pricing regulations), which allows adjustments for free of charge transactions between related parties. 

o Validated SUNAT’s use of the Comparable Uncontrolled Price (CUP) method, based on market interest rates applicable to similar companies. 

o Rejected the use of interest rates published by the banking regulatory authority in Peru (SBS), as they do not allow for an adequate comparability analysis. 

Conclusion 

The court upheld SUNAT’s classification of the disbursements as loans subject to transfer pricing rules, but overturned the adjustment due to the lack of an adequate comparability analysis, particularly the use of SBS interest rates, which do not consider relevant comparability elements such as solvency, risk, and loan conditions. 

This highlights the importance of conducting a thorough and accurate transfer pricing analysis to support tax adjustments and underscores the taxpayer’s ability to challenge inappropriate methodologies and applications by SUNAT.

This article is based on Tax Court Resolution No. 04064-3-2024.

For more information, please contact: bruno.rojas@basefirma.com

Share this post:

Join Our Newsletter

Sign up to learn more about BaseFirma and how we can help you.

Scroll to Top