SUNAT and the Profit Test: Which Services are Exempt from this Obligation?
In the tax compliance framework, the Profit Test is essential to control intercompany transactions in Peru. The SUNAT (Superintendencia Nacional de Aduanas y de Administración Tributaria – National Superintendence of Customs and Tax Administration) has recently issued Report No. 000070-2024, which clarifies which types of transactions are exempt from this test regarding the procedure of related companies for leasing goods and licenses for the use of trademarks. Below, we will address the details.
What Is the Profit Test?
The Profit Test, established in paragraph i) of article 32-A of the Income Tax Law, is a requirement that deduces costs or expenses derived from services rendered among related companies. It aims the service rendered to contribute economic or commercial value to the receiving company, improving or maintaining its position in the market. Thus, companies must demonstrate that the service received would be comparable to what an independent company would be willing to pay under similar circumstances.
Transactions Exempt from the Profit Test
The SUNAT report clarifies that certain related party transactions are not subject to the Profit Test. In particular, leasing real and personal property and granting licenses for using trademarks are not considered “services” under Article 32-A of the Income Tax Law and, thus, not required to comply with this test.
1. Leasing of Real and Personal Property
Leasing, according to the Civil Code and the OECD guidelines, is not classified as a rendering of services, given that the lease contract involves an “obligation to give” (transferring the use of a good) and not an “obligation to do” (service performance). Therefore, it is not subject to the Profit Test, although regulated under other tax provisions.
2. License to Use a Trademark
Regarding trademark use licenses, Decision 486 of the Andean Community establishes that these transactions also do not qualify as service rendering. The license to use a trademark implies granting the temporary right to use an intangible good, also considered an “obligation to give.” As in the above case, it is not subject to the Profit Test but regulated by other tax rules.
Significance for Related Companies
The recent SUNAT report provides clarity to related companies regarding their tax obligations. Those leasing goods or licensing using a trademark are not subject to the Profit Test. Conversely, it does not exempt them from complying with other tax regulations, so companies must keep updated and ensure compliance with all their tax obligations.
Conclusion
The exclusion of the Profit Test for leasing goods and trademark licenses is a measure that facilitates the tax management of related companies, clarifying their tax obligations. Conversely, companies must maintain proper documentation and comply with all other applicable tax provisions.
Source: Report No. 000070-2024-SUNAT/7T0000, "Institutional Consultation on the Profit Test."
