Law and regulation of Covid-19 tax relief in Peru

• Companies with income up to 2,300 Tax Units (aprox. USD 2.7MM) have been granted an extension to submit the February Monthly Tax Return for VAT to June this year. However, if the taxpayer under this threshold is not within the “Taxpayer Principal Registry” the deadline is July this year.
• Companies with income up to 5,000 Tax Units (aprox. USD 6 MM) have been granted an extension to submit the March, April, May and June VAT Return to June, July and August this year. However, if the taxpayer under this threshold is not within the “Taxpayer Principal Registry” the deadline from March to August 2020 may even extend to October this year.
• Companies with income up to 2,300 Tax Units (aprox. USD 2.7MM) have been granted the possibility to get the refund of input VAT charged on purchases (import and new capital assets). Such exceptional regime will be at disposal until December 2021.

• Companies and individuals with income up to 5,000 Tax Units (aprox. USD 6 MM) have been granted an extension to submit the Income Tax Annual Return 2019 to June 2020 (originally was set forth to March/April). However, if the taxpayer under this threshold is not within the “Taxpayer Principal Registry”, the deadline may even extend to July/August this year.
• Companies and individuals with income up to 2,300 Tax Units (aprox. USD 2.7MM) have been granted an extension to submit the February Monthly Tax Return for Income Tax Advance Payment to June this year. However, if the taxpayer under this threshold is not within the “Taxpayer Principal Registry”, the deadline is July this year.
• Companies and individuals with income up to 5,000 Tax Units (aprox. USD 6 MM) have been granted an extension to submit the March, April, May and June Monthly Tax Return for Income Tax Advance Payment to June, July and August this year. However, if the taxpayer under this threshold is not within the “Taxpayer Principal Registry” the deadline from March to August 2020 may even extend to October this year.
• Deadlines to file Local File 2019 have been extended one month only for companies with income up to 5,000 Tax Units (aprox. USD 6 MM) namely from June 2020 to July 2020. However, if the taxpayer under this threshold is not within the “Taxpayer Principal Registry” the deadline is extended to August this year.
• Peruvian Tax Administration has been allowed to advance the Income Tax refund for fiscal year 2019 in favor to individuals (Income Tax overpaid).
• Legislative Decree No. 1471 approved payment facilities regarding Income Tax Advance Payments of April, May, June and July. A system of comparison was approved between same months of 2020 and 2019 in order to reduce the cash flow impact during Covid-19 crisis.
• Through Legislative Decree No. 1488 it was approved a depreciation special regime for inmovable property and constructions (depreciation will be at 20%) meeting some requirements. Also, computer equipments, machines and transport vehicles (new ranges from 20% to 50%). Finally, assets from restaurants, hotels, tourism agencies, among others (new ranges from 20% to 33.33%).
• Through Legislative Decree No. 1481 it was approved an exceptional extension of the period of carry forward of the tax loss corresponding to 2020 fiscal year. Instead of 4 years the new term is 5 years following the year of the loss.

Security contributions

• During the month of April 2020, companies withholding  security contributions obligation (Private Pension System AFP) is suspended and this amount has to be paid to the employees. 
• This includes both obligatory contribution equivalent to 10% and the payment of the AFP´s commission. 
• Employees who belong to the National Pension System (ONP) will continue with the contribution discount in April.
• During the month of April, companies must declare and pay the amount corresponding to the Collective Disability and Survival Insurance of the Private Pension System.

Subsidy

• The Government will  award a subsidy to the companies of no more than 35% of the sum of the gross monthly wages corresponding to employees who comply with the following conditions:
  • Receive a gross monthly remuneration up to  1,500.00 PEN, and generate fifth category income.
  • They are duly registered in the Payroll corresponding to the working period of January 2020, and submitted to February 29, 2020; and whose work period, according to the T-Register, does not indicate an end date or is not earlier than March 15, 2020.
• The companies who comply with the aforementioned requirements have to communicate their bank transfer account to Tax Authority (SUNAT) until April 07, 2020.

PLAME (PAYROLL) 

• Companies with income up to 2,300 Tax Units (aprox. USD 2.7MM) have been granted an extension to submit the February PLAME Return to June this year.
• Companies with income up to 5,000 Tax Units (aprox. USD 6 MM) have been granted an extension to submit the March, April, May and June PLAME Tax Return to June, July and August this year.

• Companies with income up to 5,000 Tax Units (aprox. USD 6 MM) have been granted extensions regarding filing January, February Sale and Purchase Books  to June this year.
• Companies with income up to 2,300 Tax Units (aprox. USD 2.7 MM) have been granted extension regarding filing February Sale and Purchase Books  to July this year.
• Companies with income up to 5,000 Tax Units (aprox. USD 6 MM) have been granted extensions regarding filing March, April, May and June Sale and Purchase Books  to June, July and August this year. 
• Companies with income up to 5,000 Tax Units (aprox. USD 6 MM) have been granted special extensions regarding filing March, April, May, June, July and August Sale and Purchase Books  even to October this year provided that those are not included within the “Taxpayers Principal Registry”.
• Companies with income up to 5,000 Tax Units (aprox. USD 6 MM) have been granted extensions regarding filing Tax and Accounting Books to June this year.
• Companies obliged to issue “Authorized Documents” (Public Services companies, Banking Entities, among others) have been granted an extension to implement Electronic Issuing System to May 31, 2020.
• Installments, deferrals or both together that are due as of March 31 and April 30, 2020 are not computed for the loss of the installment, deferment or both together, provided they are paid until May 29, 2020 with arrear interest.
• Fines will not be imposed by Peruvian Tax Administration during the State of National Emergency declared by the Peruvian Government.
• It has been established an extraordinary procedure to  request the disposal of the funds related to detraction regime  accumulated to March 15.
• Exporters companies with income up to 2,300 Tax Units (aprox. USD 2.7MM) have been granted the right to get the VAT tax refund (Exporter Balance) without guarantees. 
• All deadlines regarding tax procedures namely tax audits, contentious and non-contentious proceedings before Peruvian Tax Administration and Administrative Tax Court are suspended during 30 business days. 
• Among others, on arrears interest rates: For tax debts in national currency, it has been reduced from 1.2% to 1% per month.
• The Metropolitan Municipality of Lima has deferred the due dates for the payment of instalments for the year 2020 corresponding to municipal taxes starting now from July 2020.
• In order to ensure the priority attention of the population and contribute to the containment of the pandemic produced by COVID-19, the procedure for the acceptance of donations coming from abroad and entering the country has been relaxed. 
  The procedure will be applicable to all entities and dependencies of the public sector corresponding to the levels of National, Regional and Local Government, Judicial Power, Legislative Power, constitutionally autonomous organisms, decentralized public institutions and other public entities.
• Metropolitan Municipality of Lima has modified the due dates for the payment of quotas for the financial year 2020 corresponding to the Property Tax, Municipal Taxes and Vehicle Tax to July, September and November. 
• Municipal Taxes on arrears interest rates: For tax debts in national currency, it has been reduced from 1.2% to 1% per month.
• Tax Administration has approved the filing of Tax Return in all cases through virtual means with the purpose to avoid direct contact among persons.
• Tax Administration approved the obtaining of Clave SOL (user and password to perform on-line proceedings before SUNAT) through the APP Personas.
• Tax Administration approved the payment of tax debts through valued electronic documents (Public Investment Certificates).
• Tax Administration approved the “Virtual Window” with the purpose to facilitate the electronic filing of documents as well as following-up the status. Some exceptions are included.
• The “Taxpayer Register Number” may be obtained or re-activated through “Virtual Window” in order to avoid personal contact due to Covid-19 pandemic.
• An electronic notification procedure was approved by Peruvian Tax Court.
• Debt Deferment and Fractionation Scheme: Through Legislative Decree No. 1487 it was approved a deferment  (6 months) and fractionation regime (up to 36 months) for, among others, taxpayers that in March or April 2020 obtained less income than similar periods within 2019. Finally, in July 2020 was approved the regulation in which, among others, it was set up the “Virtual Form 1704” to access the benefit.
• It was approved a discretional power not to determine or punish customs infractions (extensions have also been approved due to extensions in the emergency situation by Peruvian Government).

• Through Law No. 31011, published on March 27, 2020 and effective from the day following its publication, the Congress of the Republic granted the Executive Power the power to legislate on the following matters of fiscal and tax policy:
  • Temporarily suspend the current tax rules and establish measures for economic recovery.
  • Establish provisions that facilitate the payment of tax debts administered by SUNAT.
  • Modify the Income Tax legislation regarding the procedure of advance payments, carry-over of losses, period of depreciation and expense for donations.
  • Redesign, eliminate or modify the simplified tax regimes for micro and small taxpayers, extend the RERA MYPE and extend the period of authorization for SUNAT to exercise the functions of registration and verification in matters of digital signature.