Peru – Transfer Pricing (2025)

Legal framework and scope

Peru’s transfer pricing framework is grounded in the Income Tax Law (LIR), principally Chapter V and articles 32º and 32-A, together with its regulation in Supreme Decree No. 122-94-EF (Chapter XIX). Article 32-A(4) of the LIR enshrines market value for related-party transactions and transactions involving non-cooperative jurisdictions or preferential tax regimes: the price or amount is that which independent parties would have agreed in comparable transactions under the same or similar conditions. The domestic rules therefore apply to transactions between related parties and to operations conducted from, to, or through jurisdictions with low or zero taxation or preferential regimes.

Arm’s Length Principle and the role of the OECD Guidelines

The arm’s length principle is explicitly incorporated in Article 32-A(4) of the LIR. The Peruvian legislation also provides that the OECD Transfer Pricing Guidelines (TPG) are a source of interpretation: Article 32-A, subsection h) states that the OECD TPG may be used for interpretation provided they do not conflict with provisions of the Law. SUNAT (the National Superintendence of Customs and Tax Administration) applies OECD methodologies and criteria in practice within the domestic legal framework.

Definition of related parties (thresholds, control, kinship, PEs)

Article 32-A, subsection b) of the LIR provides a general definition of related parties, stating that two or more persons, companies or entities are related when one participates directly or indirectly in the management, control or capital of the other, or when the same person or group participates directly or indirectly in the management, control or capital of several entities. Supreme Decree No. 122-94-EF, Article 24, details specific situations creating related-party status: direct or indirect ownership greater than thirty percent (30%) of the capital of another legal person; ownership of 30% or more of the capital of two or more legal persons by the same natural or legal person; inclusion of spouses and relatives up to the second degree for threshold calculation; common partners holding over thirty percent (30%); common directors, managers or other decision-making officers in financial, operational or commercial matters; consolidation of financial statements by two or more persons or entities; and contractual structures such as joint venture or business collaboration agreements with separate accounting or without separate accounting where applicable criteria lead to treating the parties as related. The regulation also treats permanent establishments: a non-resident with one or more permanent establishments (PEs) in Peru is related to each of its PEs, and a resident with PEs abroad is related to each PE.

The regulation also addresses dominant influence, understood as control of the absolute majority of votes in governing bodies; in certain matters (Article 126° of the General Companies Law), a person is considered to exert dominant influence if they hold the highest number of voting shares at the time of the resolution and at least ten percent (10%) of subscribed voting shares. A relationship is also considered to exist when a Peruvian-resident entity derives eighty percent (80%) or more of its sales in the prior taxable year from a related party (and those sales represent at least thirty percent (30%) of the other party’s purchases), with a three-year averaging rule for entities operating more than three years. Exceptions include state business activity where government participation exceeds fifty percent (50%). The regulation further contemplates transactions conducted through interposed persons to conceal related-party transactions.

Methods and selection criteria

Peruvian law enumerates internationally accepted transfer pricing methods. Article 32-A, subsection e) of the LIR lists and defines the Comparable Uncontrolled Price (CUP) method, the Resale Price Method, the Cost Plus Method, the Profit Split Method, the Residual Profit Split Method and the Transactional Net Margin Method (TNMM). The statute describes calculation approaches (e.g., gross profit margin, added-cost margin) and permits exceptional use of other methods when the listed methods cannot be applied due to the nature of the transactions.

Peru applies the “most appropriate method” standard rather than a strict hierarchy. Article 32-A, subsection e) and Supreme Decree No. 122-94-EF, Article 113 set out criteria for method selection: compatibility with the business or commercial structure, availability and quality of information, degree of comparability between parties, transactions and functions, and the requirement for the lowest level of adjustment to eliminate differences between the tested transaction and comparables.

Comparability and ranges (preference for comparables, adjustments, ranges)

Peru largely follows the comparability analysis guidance of Chapter III of the OECD TPG, as noted in Article 32-A, subsection d) and in Supreme Decree No. 122-94-EF, Articles 110 to 115. The domestic rules show a preference for local comparables; Article 32-A, subsection d) allows taxpayers to use foreign comparables only when local information is unavailable, applying adjustments to reflect market differences. SUNAT uses confidential comparables in its assessments, but under the Tax Code, Book II, Title II, Chapter 2, Article 62, paragraph 18, taxpayers may access the information used by SUNAT subject to confidentiality safeguards (without disclosure of RUC or taxpayer name).

When two or more comparable transactions are available, the regulation requires the determination of a price, consideration or profit margin range. Article 114 of the Income Tax Regulation establishes that the interquartile method and median calculation (per Article 115 of Supreme Decree No. 122-94-EF) shall be used to determine the acceptable range. Comparability adjustments are required and the regulation lists factors that should be considered to eliminate differences: payment terms, negotiated amounts, marketing and advertising, intermediation costs, conditioning, freight and insurance, and physical nature of goods, services or rights.

Documentation and reporting (Master, Local, CbC, thresholds, language, timing, forms)

Peru requires transfer pricing documentation: Local File, Master File and Country-by-Country (CbC) report consistent with the OECD Annexes. Article 32-A, subsection g) of the LIR and Supreme Decree No. 122-94-EF (Articles 116 and following) regulate thresholds and filing timing.

Thresholds and timing are specified as follows. Local File is required when the taxpayer’s accrued income exceeds 2,300 Tax Units (UIT). The profile cites an approximate equivalent of EUR 2,209,000 for this threshold, and notes that the UIT for 2021 was PEN 4,400 (approx. EUR 960). Master File is required when the group’s accrued income exceeds 20,000 UIT (approx. EUR 19,213,000). Country-by-Country reporting is required for taxpayers that are members of MNE groups preparing consolidated financial statements and whose consolidated revenue exceeds PEN 2,700 million (approx. EUR 589,501,000). All filings are annual. The Local File is filed according to the schedule for declaration and payment of monthly settlement taxes for the May tax period of the fiscal year following the reported year; the Master File and the CbC report are filed according to the schedule for the September tax period of the fiscal year following the corresponding reporting year. All submitted affidavits and supporting information must be in Spanish.

SUNAT may exclude taxpayers from the obligation to submit informative affidavits (Local File, Master File and/or CbC) under Article 32-A, subsection g). Administrative resolutions contain more detail: Resolución de Superintendencia N.º 014-2018/SUNAT sets Local File thresholds and simplifications (exemption when accrued income ≤ 2,300 UIT or related-party transactions < 100 UIT; simplified local file when related-party transactions between 100 and 400 UIT), and Resolución de Superintendencia N.º 163-2018/SUNAT provides Master File thresholds and related exemptions (exemption when group accrued income ≤ 20,000 UIT and related-party transactions < 400 UIT). Companies part of certain State business activities under Legislative Decree 1031 may also be excluded from Local File obligations under specified conditions.

Penalties and compliance incentives

The Tax Code establishes penalties for non-compliance with transfer pricing documentation obligations. Article 176, numerals 2, 4 and 8, sanction failure to submit informative affidavits, submission of incomplete or non-conforming affidavits, and non-submission without regard to SUNAT’s guidelines; penalties include a fine equal to 0.6% of net income for non-submission or incomplete submission, and a fine equivalent to 30% of one UIT for failure to file without adhering to rules. Article 177, numeral 27, sanctions failure to produce or file documentation supporting the Local File, Master File and/or CbC with a fine of 0.6% of net income, not less than 10% of one UIT and not exceeding 25 UIT.

Safe harbours, exemptions and materiality

The Peruvian framework does not establish general safe harbour regimes for industries or transaction types. However, the SUNAT’s administrative resolutions provide exemptions and simplified filing regimes based on thresholds and transaction values as described above. Additionally, the Law allows SUNAT to exclude taxpayers from filing obligations under Article 32-A, subsection g).

APAs and MAP; procedures and timing

Peru provides administrative mechanisms to prevent and resolve transfer pricing disputes. Consultations under Article 95-A of the Tax Code are considered a form of ruling for transfer pricing matters. The legal framework contemplates Advance Pricing Agreements (APAs) and Mutual Agreement Procedures (MAPs). In practice, the domestic framework establishes the possibility of unilateral APAs with resident taxpayers; however, at the time of the profile Peru has not implemented bilateral or multilateral APA programs, so APAs have been essentially unilateral. The profile does not provide detailed statutory timelines for APA or MAP processing beyond referencing the enabling provisions.

Secondary adjustments and year-end adjustments

Peru recognises secondary adjustments. Supreme Decree No. 122-94-EF, Article 109, subsection d) provides that if a transfer pricing adjustment results in amounts that should be treated as dividends under Article 24-A of the LIR, those amounts may be considered indirect taxable income subject to the dividend tax. The profile indicates the dividend tax rate is five percent (5%). Year-end adjustments are not explicitly required or authorised by regulation; nevertheless, taxpayers commonly perform internal year-end assessments and may reflect transfer pricing adjustments in their income tax returns (e.g., additions for transfer pricing adjustments) where appropriate.

Other legislative aspects (interest limitation and CFC rules)

Peru has implemented interest limitation rules in line with BEPS Action 4 by Legislative Decree No. 1224, effective as of 1 January 2021. The deduction of interest expense arising from related and unrelated party loans is limited to 30% of EBITDA of the previous fiscal year, where EBITDA is defined as taxable earnings before interest income and expense, depreciation and amortization. Interest expense that exceeds this threshold may be carried forward and deducted in the following four fiscal years. The rule applies regardless of whether the debt instruments were issued before 1 January 2021. Exceptions include taxpayers with net profits not exceeding 2,500 Tax Units and taxpayers engaged in certain public infrastructure projects or public service contracts under Legislative Decree No. 1224, among other exceptions. Relevant statutory references include Article 37, subsection a) of the Income Tax Law and Supreme Decree No. 122-94-EF, Chapter VI, Article 21, subsection a), paragraph 6.

Peru also maintains a controlled foreign company (CFC) regime: Article 114(9) of the Income Tax Law covers situations where income arising from certain related-party transactions is deductible by the domestic taxpayer and such income is not Peruvian-source or is subject to a presumption under Article 48, or is taxed at less than thirty percent (30%).

Conclusion

Peru’s transfer pricing regime sets out a comprehensive domestic framework that incorporates the arm’s length principle, recognises the OECD TPG as interpretative guidance, defines related parties in detail, prescribes internationally recognised methods and requires documentation in three tiers consistent with OECD standards. The system includes thresholds and simplified filing rules, sanctions for non-compliance, an interest limitation rule aligned with BEPS Action 4 and a CFC regime. Practical gaps remain in areas such as bilateral/multilateral APA implementation and further regulatory detail on certain topics, which may require additional administrative guidance.

References

For further information and OECD country profiles see: https://www.oecd.org/en/topics/sub-issues/transfer-pricing/transfer-pricing-country-profiles.html