PERU

On May 6, the Executive published Supreme Decree No. 145-2019-EF in the Official Gazette. The measure establishes the application and scope of the General Anti-evasion Norm (NAG for its acronym in Spanish) set out in the broader Norm XVI of the Preliminary Title of the Tax Code, which seeks to discourage the use of tax avoidance mechanisms. The overall goal is to boost tax revenue and expand the tax base.

The NAG may be applied in situations such as cases where profitability is low or weak, or the company’s structure is below market value; corporate or business reorganizations or restructurings of apparently minimal economic importance; and the use of unusual legal, corporate, contract or other figures affecting the deferral of income or profit, among others.

The regulations stipulate that the SUNAT’s powers in relation to the application of the General Norm on Anti-evasion are subject not only to the legal and regulatory framework but also to the Political Constitution.

The decree foresees the creation of a Review Board which will determine, in any given case, whether there are elements that justify the application of the General Norm. The Board will also be empowered to summon those audited to present their reasons concerning the observations made.