The National Superintendency of Tax Administration (SUNAT) amended Annex III of Superintendency Resolution No.014-2018/SUNAT to more strictly regulate the use of methods other than the Comparable Uncontrolled Price (CUP) in export and import transactions involving goods included in Annex 2 of the Income Tax Law Regulations.
Key requirements of the new technical support
With this amendment, taxpayers using a method other than the CUP must submit technical support containing the following in the Local File (Virtual Form No. 3560):
- Economic, financial, and technical reasons justifying the inadequacy of the CUP to reflect the reality of the transaction.
- Quantification of the impact generated by the distorted application of the CUP.
- Supporting documentation, such as appraisals, valuations, technical reports, or others.
- Function, asset, and risk analysis (FAR) justifying the alternative method.
- Comparison with transactions between independent third parties, demonstrating that the comparables are not applicable or are unreliable.
In addition, all this information must be kept and made available to SUNAT when requested.
Implications for taxpayers
This amendment seeks to align local practice with international transfer pricing standards and avoid the arbitrary use of the so-called “Sixth Method.” Therefore, companies that operate with goods that are difficult to compare must rigorously evaluate the need for alternative methods, documenting their technical and economic analysis in detail.
Recommendation for companies
Taxpayers should review their foreign trade operations and identify whether they apply methods other than CUP. If so, it is crucial that they adequately document their methodological choice and update their Local Files in accordance with the new requirement.
Does your company apply the Sixth Method? At TPC Group, we have transfer pricing specialists who will help you technically and legally support your methodology before SUNAT. Contact us to ensure your tax compliance.
Source: Superintendency Resolution No. 000123-2024/SUNAT published on June 14, 2024, in the Official Gazette El Peruano.