TMC Italy SpA is a parent company which provides services and support to the commercial production activities of its affiliated companies based in foreign countries (Spain, Czech Republic, Germany, France, Israel, Brazil, United Kingdom). The costs of providing these intra-group services had been allocated between the related parties based on the number and salary of employees in FY 2008 and 2009. The tax administration issued an assessment where the allocation was instead be based on turnover – due to data supporting better correlation. The Court of first instance held in favour of the tax authorities. This decision was appealed by TMC to the Supreme Court. Judgement of the Court The Court dismissed the appeal of TMC in its entirety and decided in favour of the tax authorities. Excerpts: “CTR considered legitimate and correct the use of the method of allocation of the profits of the transactions adopted by the Office, as provided for by the OECD Guidelines 2010, since the ... Read more

In February 2019, Colegio de Abogados de La Libertad (CALL) in Peru filed an appeal before the Constitutional Court claiming that tax debts of at least 9 billion soles (USD 2,5 billions) owed by 158 large companies could not be collected by the tax authorities (SUNAT) due to the statute of limitation in Legislative Decree 1421. By four votes against and one vote for, the Constitutional Court rejected the claim. NoCOMPANY/TAXPAYERSTATUTE OF LIMITATIONS INVOKEDSTATUTE OF LIMITATIONS NOT INVOKEDTOTAL 1COMPAÑIA DE MINAS BUENAVENTURA S.A.A.2.083.106.4842.083.106.484 2SCOTIABANK PERU SAA1.076.546.4201.076.546.420 3COMPAÑIA MINERA ANTAPACCAY S.A.2.961.028725.065.302728.026.330 4MINERA LAS BAMBAS S.A.698.986.212698.986.212 5SOCIEDAD MINERA CERRO VERDE S.A.A542.560.586542.560.586 6TELEFONICA DEL PERU SAA301.180.21257.714.287358.894.499 7LATAM AIRLINES PERU S.A.332.312.17118.782.845351.095.016 8CONSORCIO MINERO S.A. EN LIQUIDACION122.737.710171.965.780294.703.490 9EMPRESA MINERA LOS QUENUALES S.A.255.456.549255.456.549 10AMERICA MOVIL PERU S.A.C.246.510.566246.510.566 11ENEL GENERACION PERU S.A.A.236.223.504236.223.504 12VOLCAN COMPANIA MINERA S.A.A161.464.638161.464.638 13SUPERMERCADOS PERUANOS SOCIEDAD ANONIMA 'O ' S.P.S.A33.294.659104.866.817138.161.476 14UNIVERSIDAD PERUANA DE CIENCIAS APLICADAS S.A.C128.889.678128.889.678 15COMPANIA MINERA ANTAMINA S.A119.550.076119.550.076 16ELECTROCENTRO S.A.111.905.388111.905.388 17UNION ANDINA DE CEMENTOS S.A.A. - UNACEM S.A.A15.132.22692.121.037107.253.263 18UNIVERSIDAD INCA GARCILASO DE ... Read more

Whether the rule applicable to the specific situation had to be in force at the time the taxable event – in this case to the sales of the land, which were made during 2008 , 2009, 2010 and 2011, The time when the former Article 17 No. 8 of the Income Tax Law was in force – or at the later time when the tax assessment was being carried out, according to Article 64 of the Tax Code, when the rule modified by Law 20 was in force. Only once the tax authorities exercised the power to assess under Article 64 of the Tax Code, and determined that the sale was made at a value significantly higher than the commercial value of properties with similar characteristics and locations in the respective locality, was the right of the authority to collect the taxes established by the same provision born”. (Supreme Court, paragraph 7). “That, consequently, the rate of 35% should be ... Read more

In 2014, the tax authorities issued the Italien Bank a notice of assessment with which it reclaimed for taxation IRAP for 2009 part of the interest expense paid by the bank to a company incorporated under Irish law, belonging to the same group which, according to the tax authorities, it also controlled. In particular, the tax authorities noted that the spread on the bond was two points higher than the normal market spread. The Bank appealed the assessment, arguing that there was no subjective requirement, because at the time of the issue of the debenture loan it had not yet become part of the group of which the company that had subscribed to the loan belonged. It also pleaded that the assessment was unlawful because it applied a provision, Article 11(7) TUIR, provided for IRES purposes, the extension of which to IRAP purposes was provided for by Article 1(281) of Law 147/13, a provision, however, of an innovative nature, the ... Read more