Master File – Economic Group Concept

January 9, 2024

According to the current Transfer Pricing legislation, taxpayers must comply with three formal filings (Local Report, Master File, and Country-by-Country Report), as well as the complementary obligation of the Profit Test, as established in Legislative Decree No. 1312, published on December 31, 2016, which amended Article 32-A of the Income Tax Law. Herein, we will analyze a mandatory key of the Master File, corresponding to the concept of an economic group.

Law in Force

The Master Report is a report that aims to provide detailed information on the economic group to which a company belongs, such as the organizational structure, the business description of its members, group policies on intangibles, financing policies with third parties, and related companies, among other aspects related to its corporate structure. Companies required to file it must meet three conditions:

  1. Belonging to an economic group
  2. Record accrued revenue exceeding 20,000 UIT
  3. Report transactions within the scope of transfer pricing for an amount equal to or greater than 400 UIT.

From the above, we can verify that the last two conditions can be simply verified based on the financial information of the year evaluated. Conversely, the first condition is often discussed and reviewed when determining whether a taxpayer must file the Master Report.

Consolidation of Financial Statements

Although an economic group may be understood as required to consolidate the financial statements, the enactments of Article 116 of the Regulations of the Income Tax Law must be detailly reviewed:

“Group” means a set of persons, enterprises, or entities linked by ownership or control relationships such that they are required to prepare consolidated financial statements under generally accepted accounting principles or would be required to do so if the shares, interests, or other documents representing the assets of such persons, enterprises, or entities were traded in centralized trading arrangements.”

Thus, we can see that although at the beginning they mention the consolidation of financial statements, in the second part, they make the caveat that companies would be obliged if the shares were negotiated in centralized negotiation mechanisms. Therefore, not consolidating financial statements is not a criterion that rules out being part of an economic group. In addition, it is important to consider the provisions of IFRS 10 when evaluating the consolidation of financial statements.


According to the above, having a clearer concept of the definition of economic group, it is important to carry out a correct evaluation of the obligation of the Master File to avoid fines or penalties for non-compliance, being that to date, SUNAT is urging taxpayers to comply with their transfer pricing obligations, through inductive charts.