In a recent resolution, the Peruvian Tax Court has established a significant precedent on Transfer Pricing and the application of the 4.1% additional rate on deemed dividends. This ruling underscores the importance of proper documentation in related party transactions and clarifies the scenarios in which this rate applies.
Background (RTF 11541-11-2024)
The company was subject to a SUNAT (Superintendencia Nacional de Aduanas e Administración Tributaria – National Superintendence of Customs and Tax Administration) audit, which detected Transfer Pricing adjustments corresponding to the fiscal year 2013. Consequently, the SUNAT applied a 4.1% additional rate on presumed dividends, arguing that the transactions were not accurately documented, indirectly benefiting the shareholders.
Tax Court Decision
In reviewing the case, the Tax Court concluded that applying the 4.1% additional rate is only appropriate when demonstrating undocumented disbursements that indirectly benefit the shareholders. In this specific case, the Transfer Pricing adjustments were not an indirect disposition of income, as the company had complied with the documentation requirements.
Implications for Companies
This ruling emphasizes the relevance of maintaining thorough and accurate documentation in related party transactions. Companies should ensure their transactions are accurately supported to avoid tax objections and the possible application of additional rates.
Conclusion
The Tax Court’s resolution clarifies applying the 4.1% additional rate for Transfer Pricing adjustments. It highlights the need for rigorous document management and reinforces the importance of transparency in intercompany transactions.
Source: LPDerecho / MEF