Tax disputes are usually initiated as a consequence of a tax audit, which is one of the powers of the Tax Administration (Superintendencia Nacional de Aduanas y de Administración Tributaria, or SUNAT) in order to verify the correct determination of taxes. In fact, SUNAT may randomly audit a taxpayer, and the taxpayer will be obliged to submit to the tax auditor the accounting books and all the information to prove that it has correctly determined the tax that has been previously declared.

Likewise, it is also possible that tax disputes may arise as a consequence of the filing of a tax refund request submitted by the taxpayer.

The taxes that generate most tax controversies in Peru are Corporate Income Tax and VAT. They are the two most important taxes in the country, as they are the two taxes that companies must pay in Peru.

In recent years, and as a consequence of the application of greater control mechanisms, tax audit work has been extended to individuals. There are more tax disputes related to Individual Income Tax nowadays as a result.

Tax controversies can be mitigated if taxpayers prepare themselves in a preventive manner for a potential tax audit. In effect, taxpayers should:

• establish internal control mechanisms, so that compliance with tax obligations can be verified;
• have updated knowledge regarding changes in legal regulations (and the correct understanding of them); and
• anticipate audits, for which they must store and keep in an orderly and systematised manner all accounting and documentary information as well as documents to support the transactions carried out ‒ especially in the case of operations that may originate from transactions with related parties or foreign operations.

Although Peru is not a member of the OECD, the Peruvian legislator has modified the tax legislation in order to implement some of the Base Erosion and Profit Shifting (BEPS) recommendations in order to combat tax avoidance.

The BEPS recommendations that have been implemented in Peru are:

• Action 4 ‒ new thin cap rules;
• Action 5 – General Anti-Avoidance Rule (GAAR);
• Action 6 and 15 ‒ OECD Multilateral Convention signed by Peru in 2018 (albeit not yet in force); and
• Actions 8 to 10 and Action 13 ‒ related to transfer pricing rules.

These measures are believed to deter taxpayers from implementing tax planning that leads to tax avoidance situations. However, in practice, it is not clear whether they have caused an increase or decrease in tax audits or tax litigation.

On the other hand, Peru has not signed many Double Tax Treaties (DTTs) yet. The most recent was signed with Japan and came in force in 2021.

When SUNAT determines tax assessments, the taxpayer is not obliged to make the payment of the tax debt or guarantee it during the administrative phase, unless the claim has been filed to the tax authority – or appealed to the tax court ‒ after the expiration term established by the Tax Code.

Once the administrative phase is concluded, the judicial process may be initiated. However, the tax authority may initiate a collection procedure of the tax debt, unless the taxpayer obtains a court order suspending it until the process is resolved.

On the other hand, the list of tax assessments with criminal proceedings will be explained in 7. Administrative and Criminal Tax Offences.

SUNAT randomly chooses the companies to audit. However, companies that are qualified as “major taxpayers” – ie, the companies with the highest income in the country or a region – are frequently audited.

Likewise, usually when an tax audit is carried out and an operation or transaction that is non-deductible for tax purposes ‒ and will affect or be repeated in other tax periods ‒ is detected, then it is highly probable that SUNAT will audit these other periods.

Given that SUNAT has abundant information obtained from the tax returns of companies (or even from banks) and this information is obtained electronically, when a company files a tax return and there is some information that does not coincide with the information SUNAT has in its database, then it is likely that some control or tax audit action will be initiated against said company.

In the case of individuals, the control and auditing actions that are exercised on them are basically initiated owing to asset imbalances obtained through the movement of bank accounts and the information contained in the tax returns filed by individuals.

SUNAT may carry out a tax audit as long as the statute of limitations to determine tax assessments or apply penalties has not expired.

In general, the statute of limitations to assess tax and apply penalties is four years when the tax return has been filed or as follows:

• four years when the respective affidavit has been filed;
• six years when the tax return has not been filed; and
• ten years only in cases where a tax withholding agent has not paid the tax withheld to SUNAT.

Tax audits are initiated with the notification of a letter and a request for information. These may be final or partial tax audits.

Definitive Tax Audit

The purpose of this type of audit is to definitively determine the amount of the tax liability corresponding to a specific tax and tax period. With the notification of the administrative act indicating the initiation of the definitive audit, the statute of limitations of the tax and penalties is interrupted.

SUNAT has one year, computed from the date on which the taxpayer delivers all the information requested by SUNAT in the first request of the audit. In exceptional cases, this term may be extended for one more year.

Upon expiration of this term, SUNAT may not request further information. However, it may issue the resolutions of determination and fines, provided that the statute of limitations for the determination of the debt has not expired.

However, Article 62-A of the Tax Code expressly states that the aforementioned term does not apply to the audit procedures carried out by application of the transfer pricing rules or in the cases in which a report must be issued by application of Rule XVI of the Tax Code (related to tax evasion cases).

Likewise, there are some assumptions established in the regulation through which the audit term is suspended – ie, the term of the extensions requested by the taxpayer during which the statute of limitations to determine the tax and apply penalties is also suspended.

Partial Tax Audit

In this procedure, the tax authority only reviews a part (one or some of the elements) of the tax obligation. It lasts for six months unless a higher level of complexity or tax evasion is involved. Additionally, there is the electronic partial audit, which is performed virtually and must be carried out within 30 working days.

The partial audit procedure does not interrupt the statute of limitations to determine the tax liability. However, if one of the assumptions of suspension of the audit period is faced, the statute of limitations of taxes and fines is therefore suspended.

Traditionally, tax audits were performed at the taxpayer’s tax domicile, which is still allowed by law. However, as of 2020, SUNAT has been performing electronic tax audits ‒ for which, it has developed digital tools that enable taxpayers to provide information and documentation to SUNAT auditors without the need for the auditor to go to the taxpayer’s offices or for the taxpayer to go to the SUNAT’s offices.

In this regard, almost all tax audits performed by SUNAT are currently conducted electronically.

In a tax audit of a company, special attention should be paid to:

• the substance of the transaction;
• deductible expenses;
• transactions with related parties;
• transactions from/to/through tax havens; and
• tax loss carryforwards.

In this regard, the taxpayer must provide to auditor not only the information required by the tax regulations, but also all other information that may demonstrate that the transactions are real. This will depend on each specific case being evaluated.

Likewise, it is important that all the information and documentation to be submitted as evidence is delivered within the term requested by SUNAT.

It should be noted that the auditor must conclude their analysis of the documents that are submitted in the audit stage within the time deadlines set forth in the Tax Code. Therefore, in principle, in the Claim Administrative Phase, evidence that was requested in the audit and was not submitted will not be admitted as evidence unless it is submitted within 30 working days of the filing of the claim the debt related to such evidence is paid or unless the evidence could not be submitted for reasons beyond the taxpayer’s control.

In 2018, Peru signed the “Convention on Mutual Administrative Assistance in Tax Matters” in order to exchange information with the tax authorities of other countries. As consequence of the subscription to that Convention, several changes have been made in the Peruvian tax regulations, incorporating the compliance of a series of obligations to Peruvian taxpayers so that a better control action can be carried out and information can be exchanged with other countries.

This tool allows SUNAT to have more information regarding taxpayers. The author understands that SUNAT is using this information for some audits but cannot affirm that the number of tax audits has necessarily increased as a result of the implementation of these measures. However, given the regulatory changes that have taken place in recent years, it is thought that this tool will be used much more frequently.

Key strategies to consider during a tax audit are the following:

• make an analysis of the tax risks that the taxpayer has in the period that is being audited by SUNAT;
• review and analyse the “information requirement” issued by SUNAT, in order to evaluate the defence arguments that will be presented by the taxpayer and evaluate whether the taxpayer has the documentary evidence;
• evaluate the statute of limitations of the actions by SUNAT;
• provide documentary support for the operations that are recorded in the accounting and that are being audited ‒ the information and documentation presented to the auditor must be indubitable;
• maintain constant communication with the tax auditor in order to clear up any doubts they may have regarding certain transactions;
• choose a person or a team of workers to attend the tax auditor ‒ that person or team must have experience in auditing matters and must be updated with the tax legislation; and
• retain external tax counsel from the beginning of the tax audit to provide legal support concerning the information, analysis and answers to be given to the tax auditor.

In general, when taxpayers are notified with additional tax assessment or penalties and do not agree with the determination, they may file a claim against that administrative act. Similarly, there are other types of administrative acts that may be challenged (ie, tax refund requests filed by taxpayers that have not been resolved within the legal term).

The claim is filed to the tax authority that issued the administrative act to be claimed, which will review whether the formalities established by law are complied with and then proceed to resolve the controversy by issuing a resolution. In principle, the term to file a claim is 20 working days from the date of notification of the determination act; in other cases, the term may vary.

If the taxpayer does not agree with the resolution issued by the tax authority, they may appeal to the tax court (highest authority in the administrative claim phase), unless the the tax authority issuing the challenged act has a hierarchical superior (which occurs in the case of taxes not administered by SUNAT or municipalities) ‒ in which case, the appeal must be presented to the latter and the tax court will be a third instance. The appeal is filed to the tax authority that issued the resolution resolving the claim, and this authority will send the file to the tax court.

The term to appeal the resolution to the tax court is 15 working days, except for certain exceptions. By way of example, in the case of determination acts issued as a consequence of the application of the transfer pricing rules, the term to appeal is 30 working days. Upon expiration of the term, an appeal may be filed within six months of notification of the resolution if the taxpayer pays or provides a guarantee for the entire debt. The resolution issued by the tax court will end the administrative phase and a lawsuit may be filed in the Judicial Branch against the resolution issued by the tax court.

The resolutions of the tax court must be complied with by all officers of the tax authority. The Administrative Claim Phase is mandatory in case of later wish to resort to the Judiciary.

In general, SUNAT must resolve the claims within nine months of the date of filing the claim. However, the Peruvian Tax Code establishes other time limits for certain cases, such as claims against resolutions issued as a result of the application of transfer pricing rules – in which case, the deadline to resolve is 12 months.

Once the term to resolve the claim appeal has expired, the taxpayer may consider that there is a tacit negative decision and may appeal. However, it is unusual to file this type of appeal, given that taxpayers prefer to wait and have a resolution where they can appreciate SUNAT’s arguments in order to file an appeal before the tax court.

On the other hand, in the appeal stage, the tax court has a term of 12 months (counted from the date on which the file was submitted to the court) to resolve the appeal file, subject to certain exceptions established in the law (eg, cases of resolutions issued as a consequence of the application of transfer pricing rules ‒ in which case, the term to resolve is 18 months).

It should be noted that the claimed debt will only generate interests during the term established by law for the tax authorities to resolve a claim or appeal. Therefore, the delay in resolving should not affect the increase of the debt in the administrative procedure. However, this does not occur in the judicial phase.

The resolution issued by the tax court ends the administrative phase and, as has been pointed out, such resolution can only be challenged before the Judiciary. The lawsuit may be filed before the judicial authority within three months from the day following the resolution’s notification date issued by the tax court.

The filing of the lawsuit does not interrupt the execution of the acts or SUNAT’s resolutions. Thus, if the taxpayer has obtained an unfavourable result with the resolution of the tax court, SUNAT may require the payment of the tax debt (tax assesments/penalties) and initiate a coactive collection procedure, unless the taxpayer obtains a preliminary order by the Judiciary suspending the payment (for which it must have complied with certain requirements).

The lawsuit may be filed by the taxpayer and, exceptionally, by SUNAT in those cases in which the resolution issued by the tax court incurs in a cause of nullity provided by the Law. The judge who admits the claim will request the administrative file from SUNAT.

As described in 4.1 Initiation of Judicial Tax Litigation, the judicial process begins with the filing of the claim before the contentious-administrative courts, and the case is randomly assigned to one of those courts. Subsequently, the claim is notified to the defendant, who has ten days to answer the claim ‒ although there are other regulated deadlines (for example, for sentencing, such deadlines are not applied in reality, owing to the heavy procedural burden of the courts).

After the answer to the complaint has been filed, the court in charge will declare the proceeding closed and the parties may request (or not) to speak at a hearing that will be called in order for the attorneys for the parties to present their case. After that, the court will issue a sentence, concluding the first judicial instance.

Subsequently, the decision of the first instance judge may be appealed before the Superior Court of Justice, as described in 5.1 System for Appealing Judicial Tax Litigation. Exceptionally, an appeal to the Supreme Court may be filed by filing a Cassation appeal.

According to Law 27584 (Law regulating Contentious-Administrative Process), in the contentious-administrative process, the evidentiary activity is restricted to the actions gathered in the administrative proceeding – unless new facts are produced or if they are facts that have become known after the beginning of the process. In any of these cases, the respective means of evidence may be attached.

In administrative and civil litigations proceedings, the burden of proof is on the party that asserts its claims. However, in tax crimes proceedings, the burden of proof is on the prosecutor because the defendant has the right of presumption of innocence.

Strategically, from the tax audit stage onwards, the team in charge of the audit should obtain as much documentation as possible to support the operations evaluated by the auditor, so as to better face an administrative and/or judicial process. As mentioned in 4.3 Relevance of Evidence in Judicial Tax Litigation, evidence that is not provided in the administrative file will not be evaluated in the judicial process.

Although there is a Supreme Court ruling that states that it is possible to evaluate evidence that has been submitted out of time, it is very likely that this ruling will not be complied with by the administrative courts. Therefore, it is advisable to prepare oneself from the audit stage to face a tax litigation with strong evidence.

Likewise, it is recommended that these actions are taken preventively for other tax periods in which the same operations that could be the subject of litigation are carried out, in order to incorporate corrective actions or to mitigate that tax risk.

It is also strategic to evaluate the position of the Superior Court of Justice or Supreme Court, given that in several cases they differ from what the tax court considers.

The jurisprudence issued by the Superior Court of Justice is not binding for the judges of first instance, nor for the tax court. However, according to Law 27584, when the Supreme Court establishes in its resolutions “jurisprudential principles” in contentious-administrative matters, these principles constitute binding precedent for the jurisdictional bodies. The jurisdictional bodies may deviate from what is established in the binding precedent if there are particular circumstances in the case before them and these circumstances duly motivate the reasons for which the jurisdictional bodies deviate from the precedent.

Also, the Supreme Court has issued several resolutions with different positions from those previously issued by the tax court – many of which have not been taken into account by the tax court in other cases. However, at the beginning of 2024, the Supreme Court issued a ruling in which it states that all its rulings must be complied with by the other judges of the Judiciary and administrative bodies (including the tax court), so it is expected that there may be a uniformity of criteria in the administrative venue and the Judiciary.

It is unusual for Peruvian judges to take international jurisprudence into consideration when resolving tax disputes. However, OECD guidelines should be considered for the application of transfer pricing rules.

In Peru, a judicial tax litigation is carried out under the scheme of the contentious-administrative process.

This type of judicial process has the following instances:

• Contentious-Administrative Court, which is composed of a judge and will be the one to issue the first instance sentence; and
• Specialised Chamber for Contentious-Administrative Matters of the Superior Court of Justice, which will be the one to resolve the case in the second instance.

Additionally, a “Cassation Appeal” may be filed before the Supreme Court against the decision of the Chamber of the Superior Court.

On the other hand, it is necessary to mention that there is a constitutional jurisdiction, which is different from the Judiciary. In that sense, if the matter under discussion is related to the infringement of a constitutional right, taxpayers may file an amparo injuction before the Constitutional Court.

Contentious-Administrative Court

In accordance with 4.2 Procedure for Judicial Tax Litigation, once the complaint is filed, it must be reviewed as to whether it complies with the admissibility requirements. If so, a resolution is issued admitting the lawsuit. The defendant is then notified of this resolution so that it may present exceptions, offer evidence and answer the lawsuit.

After the lawsuit is answered, the court in charge will declare the proceeding closed and the parties may request (or not) to speak in a hearing that will be summoned so that the attorneys of the parties may present their case. Finally, the court will issue a sentence ‒ upon which, the first instance ends.

Superior Court of Justice

The first-instance judgment may be appealed by the party that does not agree with it, regardless of the amount or nature of the judgment. This is because the principle of double instance is regulated in the Peruvian Constitution.

The appeal will be reviewed by a Specialised Chamber in Contentious-Administrative Matters, composed of three superior judges.

The Chamber in charge of the appeal can resolve in three possible ways – namely, by:

• confirming what was resolved in the first instance;
• revoking (reforming) what was decided in the first instance to the contrary, totally or partially; or
• annulling the decision and returning the file to any stage of the first instance.

The decision of the Specialised Chamber for Contentious-Administrative Matters puts an end to the second judicial instance in the first two above-mentioned cases.

Supreme Court of Justice

The Cassation Appeal is an exceptional recourse in which neither evidence nor facts are disputed ‒ rather, only the incorrect application, inapplication or interpretation of a norm, and the deviation from a precedent.

It may be filed against judgments of the second instance that confirm or revoke the lawsuit. This appeal, unlike the previous one, is not always granted but goes through a procedural filter before the Supreme Court itself, which may decide not to hear the controversy on the merits. It may be filed against judgments of the second instance that confirm or revoke the claim.

The Cassation Appeal proceeds in cases involving non-quantifiable claims. In the case of quantifiable claims, the appeal proceeds when the amount of the challenged act exceeds 140 Procedural Reference Units (PRU) or when the challenged act comes from a provincial, regional or national authority – or, as an exception, when the amount exceeds 140 PRU (approximately USD20,000) in the case of administrative acts issued by a district administrative authority.

The lawsuit in the first instance is resolved by a judge specialised in contentious-administrative litigation.

The appeal in the second instance is resolved by a Specialised Chamber in Administrative Litigation. The Chambers are composed of three superior judges.

The Cassation Appeal is resolved by a Constitutional and Social Chamber of the Supreme Court of Justice of the Republic. The Chambers are composed of five supreme judges.

The judges that make up each of these courts have been appointed on their own merits.

Peruvian internal legislation does not have ADR mechanisms for taxes. Nonetheless, old DTTs signed by Peru (ie, the DTT between Peru and Chile and the DTT between Peru and Canada) include the option to submit the interpretation or application of the DTT to arbitration ‒ although this is not a mandatory arbitration clause.

This is not applicable in Peru.

This is not applicable in Peru.

Under Peruvian tax legislation, there are certain mechanisms that can be used in order to avoid tax disputes. Taxpayers are allowed to request a formal opinion from the tax authorities concerning a specific tax matter. Such opinions contain some rulings that are mandatory to the tax authorities in the context of a tax audit. The rulings are issued and duly published.

Even though the mentioned rulings are mandatory, there are some cases whereby the tax authorities had modified some of the criteria given by them in the past (eg, their approach regarding the indirect transfer of shares in light of the DTT between Peru and Chile). This situation creates an uncertaint climate for taxpayers.

On the other hand, Peruvian tax legislation contains Anticipated Pricing Agreements, whereby taxpayers and tax authorities could reach an agreement in order to establish the methodology and prices applied to transactions covered under transfer pricing provisions.

This is not applicable in Peru.

This is not applicable in Peru.

In Peru, when a tax audit is performed, the auditor (in addition to determining the tax assessments) determines the administrative infractions that have been committed – the penalty for which consists of a sum of money. These administrative violations are also claimed and appealed in the administrative procedure described in 3. Administrative Litigation and in the judicial procedure described in 4. Judicial Litigation: First Instance and 5. Judicial Litigation: Appeals.

On the other hand, the determination of tax assessments and penalties does not automatically result in a tax crime. For a crime to exist, there must be conduct that demonstrates the simulation of the fulfilment of certain requirements in order to obtain a tax advantage or benefit, or there must be a tax fraud, so that the assumptions provided in the rule that qualify as tax crimes are met.

However, if the auditor who carries out the audit considers during the tax audit that it is possible that a tax crime has been committed, the auditor must inform the superior, and SUNAT may ask the Public Prosecutor’s Office to carry out an investigation. The prosecutor will carry out its investigation and as a result may file the file or formalise a preparatory investigation. In that sense, it is possible that the administrative file and the criminal file are parallel.

The application of a GAAR rule excludes the possibility of the existence of a criminal penalty – given that the GAAR rule is applied in situations where there are assumptions of tax avoidance, not tax evasion.

The administrative file and the criminal file may be under discussion in the administrative and criminal courts at the same time. However, there is jurisprudence in which it has been established that the tax court may resolve the administrative file if it has sufficient elements to resolve it; however, if it needs the criminal file to be resolved, then it must suspend the administrative process until the criminal process is resolved.

In accordance with 7.1 Interaction of Tax Assessments With Tax Infringements, administrative infringements are determined during the tax audit and may be challenged and appealed jointly with the tax assessments. However, only some of these proceedings may result in prosecutions for criminal cases.

In a criminal proceeding, prior to the accusation phase, there is a preparatory investigation phase, which concludes with an acquittal or criminal accusation. Subsequently, the file is submitted to the specialised court, whose sentence may be appealed before:

• the Specialised Criminal Chamber of the Superior Court of Justice, which will review the sentence issued by the first-instance judge; or
• the Criminal Chamber of the Supreme Court, in which only questions of pure law may be discussed but evidence may not be evaluated.

These judges and/or chambers belong to the Judicial Branch, but are different from those that resolve tax litigation related to tax assesments and tax infractions.

In Peru, there is a gradual penalty regime, by means of which ‒ depending on the time at which the taxpayer decides to make use of it ‒ the taxpayer can obtain a reduction in the tax fines that can be between 95% and 40% by paying the full amount of the tax debt (including interest).

According to the Tax Code, if the taxpayer decides to pay the tax omitted or return the tax benefit obtained (with interest) and pay the penalties incurred before a tax audit is initiated for the tax and tax period where the conduct constituting a tax offence took place, there will no longer be any criminal action.

See 7.5 Possibility of Fine Reductions.

The accused may file an appeal against the decision adopted by the court of first instance before the Specialised Criminal Chamber of the Superior Court of Justice.

The application of the GAAR, Specific Anti-Avoidance Rules (SAAR) or transfer pricing rules are considered in tax audits. If a tax payable is determined, there will be tax penalties. Therefore, when claimed in administrative and judicial proceedings, these penalties follow the nature of the main debt – ie, to the extent that it is proven that the determination made by the auditor with regard to the tax assessment is not correct, the penalty will be eliminated.

On the other hand, the GAAR do not cause the generation of tax crimes by express provision of the rule. Hence, the same treatment should be given to the SAAR – given that both rules combat evasive behaviours, not evasive ones. Likewise, there is no information to indicate that the application of transfer pricing rules has given rise to tax crimes.

In Peru, it is common to use domestic legislation against additional assessment done by the tax authorities. Conversely, it is not so common to use the mutual agreement procedure. In this scenario, taxpayers must start at the administrative claim phase and – in the event of an unfavourable outcome – take the case to a judicial court.

Measures adopted to prevent BEPS have thus far not had a significant impact in this regard. However, there are some provisions introduced in the recent DTT that tackles “treaty shopping”, among other undesirable practices.

There is a lack of jurisprudence in this regard, as the GAAR was implemented in 2012 and its application was suspended until 2018. However, in general terms, the GAAR and the SAAR should not in principle collide with the DTT provisions, as they have different purposes ‒ although international law shall prevail if, for any reason, they do.

In light of the Principap Purpose Text, it is highly likely the tax authorities will examine an appropriate application of a DTT in order to determine whether it was used for the sole or principal purpose of obtaining a tax advantage that would not be available in the absence of the treaty involved.

In Peru, the main international transfer pricing adjustments have been challenged in domestic tax courts by using international transfer pricing guidelines, which are included in the domestic law.

Despite the fact that Peru has implemented advanced pricing agreements, they are not so common in practice.

According to domestic provisions, taxpayers that intend to apply an advance pricing agreement must submit a request to the tax authorities before the execution of the transactions involved. In such request, the taxpayer must exhibit a valuation proposal for the future transaction, as well as information and other necessary documentation in order to explain the relevant facts of the methodology to be applied. The valuation proposal must be submitted by all the parties involved in the transaction.

The proposal for the advance pricing agreement must contain the following items:

• a description of the transaction;
• the identification of the parties involved;
• the methodology valuation;
• the selection of the companies or comparable transactions and its supporting documentation;
• the fiscal years whereby the comparable where analysed;
• the adjustments corresponding to the selected comparable;
• the price or, if that is the case, a range of prices, amount of the transaction or profit margin; and
• the base hypothesis of the proposed formula. 

The advanced pricing agreements would be applied in the fiscal year where its approval took place and during the upcoming three fiscal years.

In Peru, the situation that generates most litigation is the one related to withholding taxes. This is due to the fact that there are some concepts such as technical assistance (benefited by a withholding tax rate of 15%) that are not clearly defined, which allows the tax authorities to do a case-by-case analysis. There is also a thin line between the concept of technical assistance and royalties (subject to a withholding tax of 30%), as the know-how qualifies as the latter one.

Even though there are some rulings available in this regard, the implementation of the technical assistance could still be risky, as tax authorities could have another approach to certain services when it comes to a tax audit. In order to avoid such risks, taxpayers must duly support their transactions with the corresponding documentation, with the intent to prove that there was a real service and that it fits into the definition of technical assistance. 

Even though the number of transfer pricing audits is increasing, they are still not commonly found. The same occurs with regard to private establishment (PE) disputes.

This is not applicable in Peru.

This is not applicable in Peru.

This is not applicable in Peru.

This is not applicable in Peru.

Peru has not opted for mandatory binding arbitration.

There is an arbitration clause in some DTTs signed by Peru (eg, with Canada and Chile).

It is not applicable. Peru does not adopt Action 14 of the BEPS recommendations.

This is not applicable in Peru.

This is not applicable in Peru.

This is not applicable in Peru.

Pillars One and Two are not expected to take effect in Peru in the short or medium term.

As Peru has not opted for mandatory binding arbitration, this section does not apply to Peru.

Previous DTTs (eg, between Canada and Peru) state that, if any difficulty or doubt arising as to the interpretation or application of the DTT cannot be resolved by the competent authorities pursuant to the DTT mechanism, the case may be submitted for arbitration if both competent authorities and the taxpayer agree and the taxpayer agrees in writing to be bound by the decision of the arbitration board. The decision of the arbitration board in a particular case will be binding on both contracting states with regard to that case. The procedure must be established in an exchange of notes between the contracting states.

In cases of resorting to arbitration under the provisions of a DTT, there is no impediment for independent professionals being hired by the taxpayers of Peru.

In Peru, it is not necessary to pay a fee to litigate at the administrative level. However, if the claim or appeal is filed after the term granted by the Tax Code has expired, the taxpayer must pay the tax and/or fine in order for the claim or appeal to be admitted.

At the judicial level, the taxpayer must pay some fees, which are determined according to the amount that is being disputed. These fees are paid at various times during the process.

Also, administrative acts are not suspended in the contentious-administrative process. Therefore, if the taxpayer did not obtain a favourable result in the administrative venue, SUNAT may demand through coercive procedures that the payment of the tax debt is discussed at the judicial venue – unless a preliminary order is obtained from the Judiciary suspending the payment of the debt, complying with certain conditions (eg, a provision of a bond).

In the case of an amparo proceeding (where only constitutional rights are disputed) before the Constitutional Court, there are no fees to be paid.

If the court decides that the initial additional tax assessment is absolutely void or null, the taxpayer cannot request any type of indemnity. Nevertheless, if the taxpayer has paid taxes, interest or fines in accordance with the valuation determined by the tax authority, it is possible the taxpayer could ask the refund with an interest

There are no fees because ADR mechanisms for tax matters are not applicable in Peru.

According to the information published by the Ministry of Economy and Finance on its web page, as of 30 November 2023, there were 11,219 tax cases pending before the tax court. However, the information regarding their total value is not public.

This is not public information.

This is not public information.

In the author’s experience, these are the strategic guidelines that should be considered by taxpayers in order to avoid tax controversy or ‒ in the case of litigation ‒ to obtain a favourable result:

• an internal tax audit prevention programme should be put in place, which obliges the taxpayer to have as much documentation as to prove their transactions;
• implement a tax compliance policy;
• submit the documentation at the time requested by SUNAT, attaching solid and convincing evidence – the documentary evidence is fundamental to obtain a favourable result in a tax audit process; and
• have a legal advisor from the beginning of an audit until the conclusion of a process, so that the process can be handled in the most efficient and safe way.