International context and local relevance
In a world marked by neo-mercantilist policies and the implementation of the OECD’s BEPS 2.0 project, tax authorities are intensifying their scrutiny of intragroup transactions, including loans, royalties, and interest. In this regard, multinational groups must demonstrate real economic substance, treasury functionality, and market-based rates.
Neo-mercantilism and regulatory pressure
Policies that favor the protection of domestic industries and seek to safeguard tax bases have redefined the landscape, pushing countries to question corporate financing structures that use low-tax jurisdictions. As a result, the legitimacy of related-party loans is now assessed not only from a tax efficiency perspective, but also from the real economic function behind each transaction.
BEPS 2.0 redefines financial planning standards
Pillar 1 relocates taxing rights to the consumer market, while Pillar 2 imposes a global minimum tax of 15%, reducing the profitability of low-tax treasury centers. These changes are forcing companies in Peru to review and update their intercompany lending, cash pooling, intellectual property structures, and captive insurance policies.
Rigorous documentation and economic justification
Without solid documentation, companies risk tax adjustments, penalties, or double taxation. In response, the authorities are requiring:
- Detailed functional analysis;
- Market comparables to determine interest rates;
- Record of capital allocation decisions;
- Evidence of risk management capacity on the part of treasury entities.
Implications for companies in Peru
- Review and support each function performed by your treasury structure.
- Update intragroup agreements to reflect actual decisions and align them with market practices.
- Implement benchmarking to support interest rates and risk management.
- Scenario possible tax outcomes considering future impacts of the global minimum tax.
Call to action
At TPC Group, we have proven experience in international tax consulting. We help you:
- Conduct a comprehensive review of your intragroup structures.
- Document functions, risks, and assets with technical expertise.
- Adapt your practices to BEPS 2.0 and neo-mercantilist regulatory frameworks.
- Avoid tax contingencies and strengthen your defense against audits.
Contact our specialized team for a confidential, no-obligation assessment.
Source: LSEG