In a context where SUNAT has been stepping up its scrutiny of related-party transactions—from indirect transfers of shares to intragroup financing structures—a recent ruling by the Tax Court once again shines a spotlight on a principle that often goes unnoticed in discussions about Transfer Pricing: methodological consistency. It is not enough to simply select a method; the tax authority must support the adjustment using that same method from start to finish.
The case: a S/ 189 million assessment that did not stand up to scrutiny
The dispute stems from an audit of indirect share transfers carried out between October 2017 and February 2018, as part of a corporate reorganization of a multinational group with ties to the Netherlands. Since this involved a sale of shares abroad that impacted Peruvian subsidiaries, Article 68 of the Income Tax Law (LIR) applied, which attributes tax liability to the local entity linked to the transaction.
The taxpayer substantiated the transaction value with a technical study based on the Discounted Cash Flow (DCF) method. SUNAT, for its part, formally stated that the most appropriate method was the Comparable Uncontrolled Price (CUP) method, but when quantifying the adjustment, it ended up applying, in practice, a methodology based on DCF. The result was a tax assessment of nearly S/ 189 million.
The Tax Court, through Tax Ruling No. 06856-1-2024, overturned the assessment resolution. The reason was not a substantive challenge to which method was technically correct, but something more basic: the Administration cannot select one method and support the adjustment with a different one. That lack of consistency between the stated method and the one actually applied was sufficient to invalidate the assessment.
The regulatory backdrop: a loophole that is already being closed
To understand the scope of this ruling, one must place it in its historical context. Legislative Decree No. 1312, in effect since January 1, 2017, incorporated into Article 32-A of the Income Tax Law (LIR) the possibility of applying “other methods” of valuation when traditional methods were not appropriate. However, this concept was never regulated for several fiscal years, creating a loophole that the Tax Court has been systematically resolving against SUNAT when the agency seeks to justify adjustments to methodologies such as the FCD without express regulatory support.
This is not an isolated position. Other rulings—such as RTF Nos. 02430-3-2022, 06613-9-2020, and 07406-1-2021—have followed the same line of reasoning: without a regulation defining the scope of “other methods,” there is no technical or legal basis to support adjustments on that basis, no matter how reasonable the analysis may be from a financial perspective.
The landscape, however, is changing. Legislative Decree No. 1663, effective as of 2025, already legally recognizes the FCD and other methods as valid for Transfer Pricing purposes. And with Supreme Decree No. 302-2025-EF, those “other methods”—including the FCD—now have specific regulatory provisions. In other words: what was a loophole in 2017–2018 that favored the taxpayer now has a regulatory framework that SUNAT will be able to invoke with greater certainty going forward.
Why This Resolution Remains Relevant
The fact that the regulatory loophole is being closed does not diminish the value of the underlying principle. On the contrary: the requirement for methodological consistency is a standard that transcends the regime applicable in a specific fiscal year and will continue to be enforceable under the new regulatory framework. An objection based on a method other than the one formally selected will remain vulnerable, regardless of whether or not that method is regulated.
For Transfer Pricing teams, this translates into three practical implications:
Documentary traceability throughout the audit. The technical study and the position presented to SUNAT must maintain methodological consistency from the initial request through the assessment decision. Any change in method midway through the process—even if initiated by the Administration—is a defensible point.
Interpreting case law within its regulatory context. This RTF must be interpreted in light of the regulatory framework in effect in 2017–2018. With Supreme Decree No. 302-2025-EF now in effect, it is important to monitor how SUNAT and the Tax Court apply the new regulation in audits of subsequent fiscal years, especially in transactions involving the transfer of shares, intangible assets, and pre-operational businesses, where the FCD is the most commonly used methodology in practice.
The FCD gains legitimacy, but with stricter requirements. The legal recognition of the method does not eliminate the need for robust documentation: a detailed functional analysis, justification of economic value, and alignment with the arm’s-length principle will likely be conditions for ensuring that the FCD regulations for PT are consistent with those already in place for transactions between independent parties under Article 32 of the Income Tax Law (LIR).
Tax Ruling No. 06856-1-2024 does not debate whether or not the FCD is a valid valuation tool—in fact, it is the most widely recognized internationally in mergers and acquisitions, impairment, and the valuation of intangibles. What it does address is something more fundamental: the requirement that the Tax Administration be consistent between what it claims to do and what it actually does when determining an adjustment. With the regulation of “other methods” already in effect, this standard of methodological consistency will, more than ever, serve as the first line of defense against SUNAT’s findings in complex transfer pricing transactions.
At TPC Group, we continuously monitor regulatory and case law developments regarding Transfer Pricing in Peru and the region. If your organization is facing an audit involving non-traditional valuation methods, our team can assist you in building a solid and coherent technical defense.
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