Peru Under OECD Intangible Assets Criteria

June 19, 2025

Global Landscape and Local Background

In an environment where the OECD examines intra-group royalty payment practices, Peru faces increasing pressure to demonstrate that internal transactions address real economic value and not merely aggressive tax strategies. The BEPS (Base Erosion and Profit Shifting) project promotes an overview of the economic cycle, from development to exploitation of the asset: DEMPE Approach. 

Analysis by Stages: DEMPE Approach

First, the DEMPE requires that consideration be attributed to each activity involved in the development, enhancement, maintenance, protection, and exploitation of an intangible. Thus, the MNE must be able to demonstrate who actually generates the value before it can establish a consideration for the assignment of trademark use (royalty payments). 

Second, Pillar 2 introduces the “subject to tax rule,” which ensures that even if a payment crosses jurisdictions with a low tax burden, a tax minimum is imposed. 

Relevant Recent Cases

In Brazil, the elimination of fixed limits to deduct royalty payments provided greater flexibility as long as there was economic substance. On the other hand, South Africa questioned a Mauritian subsidiary, recognizing that the real contribution came from the local entity. 

These experiences display that the OECD is promoting a stricter approach and reflect the reaction of authorities to weak documentation or structures without economic support. 

Implications for Peru

  • Revision of the DEMPE Approach: Companies must rigorously document who developed or exploited the asset. 
  • Increased transparency: Solid Transfer Pricing reports, formal agreements, and evidence of economic benchmarking are needed. 
  • Adjustment of internal policies: Related-party transactions that do not involve substantive functions could be subject to tax adjustments. 

TPC Group Recommendations

  1. Conduct a comprehensive DEMPE analysis for each intangible asset and its related entities. 
  2. Strengthen intragroup agreements with clear functional responsibilities and cost accountability. 
  3. Prepare benchmarking reflecting the actual value generated in each jurisdiction. 
  4. Keep updated with developments in Peruvian regulations and treaties through Pillar 2 and the OECD Guidelines. 

Contact TPC Group to:

  • Audit your royalty structures. 
  • Implement a solid intellectual property transfer plan. 
  • Comply with BEPS regulations with supporting documentation. 

 

Source: ITR

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