peru meeting june 2012 lima, peru césar luna-victoria león investments requirements corporate...
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Peru Meeting June 2012Lima, Peru
César Luna-Victoria León
INVESTMENTS REQUIREMENTS
CORPORATE & TAX
Corporate
• Setting up a bussiness presence in Peru• Options
– Branch (local incomes) – Subsidiary (world wide incomes) – Joint Venture
• Peruvians = Foreigners• Residents vs Non residents
Main Taxes
• IT (Income Tax) 30%?
• VAT (Value Added Tax) 18%
IT – Income Tax
i
(e)
100
(30)
70
(3)
67
IT Corporate 30%
IT Profits 4.1%
33%
IT + W Protif Sharing
i + x
(e)
100 + x
(x)
100
(30)
70
(3)
67
W Profit Sharing
IT Corporate 30%
IT Profits 4.1%
33% + x
W Profit Sharing
• 10% Fishing, telecomunications, industrial
• 8% mining, whosale and retail, restaurants
• 5% others
• 0% small bussines, professional services
IT - Spots
• Accrual basis
• IAS (NIC’s) or Peruvian NIFF’s
• Market Value / Transfer pricing rules (OECD)
• Preoperative expenses: 1 or 10 years
• Shorter depreciation term
• IT advances payments / monthly
• Losses carry on (System A or B)
IT - Financing• Related parties
– Transfer pricing rules– Thin capitalization 3 x 1– Witholding 30%
• Non related parties– Thin capitalization not applicable– Witholding:
• 4.99% up to Libor + 7• 30% for the excess
– No back to back
IT – Capital Gains
• 30 % real state
• 5% MILA stock market
• 30% others
IT – Services from non residents
• Performed in or outside Peru– 30% royalties– 30% digital services– 15% technical assistance
• Other services – 30% performed in Peru – 0% not performed in Peru
Other Taxes
• 0.4% x assets (minimum income tax) (ITAN)
• 0.005% financial transactions tax (ITF)
• Local Tax– Up to 1% Real Estate Property Tax– 1% Motor Vehicular Property Tax– 3% Real Estate Transfer Tax
Mining Special Regime
• Special mining burden (GEM)
• Special mining tax (IEM)
• Modified royalty
Oficina de Lima.
I T E M O F I N C O M E
C O U N T R I E S
Interest Dividends Royalties General Services
Technical Assistance
COLOMBIA Unlimited source taxation only(*)
BOLIVIA Unlimited source taxation only(*)
ECUADOR Unlimited source taxation only(*)
CHILE 15% 10%-15% 15% Residence taxation, unless a Permanent Establishment in the Source State.
CANADA 15% 10%-15% 15% Residence taxation, unless a Permanent Establishment in the Source State.
BRASIL 15% 10%-15% 15% 15 %
(*) Under Andean Community Decision to avoid international double taxation. [1]
[1] Tax Treaties
Payroll Taxes
Corporate EmployeeIncome Tax 0 – 30Health contributions 9%Pension Fund 11% - 12%
Benefits• Minimum salary• 2 Legal Bonuses/year• Labor risks insurance• Profit-Sharing• CTS – Compensation for Retirement
Expatries - Witholding
• 24% independent – professional services
• 30% employment
• 15% live shows performed by artists
• 30% others
VAT
• 18%
• Recover VAT– Fiscal credit– Early recovery– Export reimbursement
Investments Warranties
• Constitutionals
• Stability agreements
• International arbitration– MIGA– CIADI– TLC Canada/Peru
¿Fiscal Turbulence?
Fiscal Needs % PBI % PBI Potential IncomesPoverty eradication 1.0 3.0 Tax burden
Health 1.7 4.0 Unexecuted budget
Education 1.9 5.0 Tax evasion
Kuntur 0.6 1.9 Fiscal costs
Infrastructure gap 1.9 -.- -.-
Total 7.1 13.9 Total
29
32
25
20 19
1412
10 10
7
0,0
5,0
10,0
15,0
20,0
25,0
30,0
35,0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
ANNUAL AMOUNT REQUIRED TO ERADICATE MONETARYPOVERTY WITH TRANSFERS
(% of the total tax revenues of the Central Government)
Source: Enaho-INEI,MEF, APOYO Consultoría
1,1
4,1
2,2
2,82,6
4,54,7
4,5
0,0
0,5
1,0
1,5
2,0
2,5
3,0
3,5
4,0
4,5
5,0
Perú Chile Colombia América Latina 1/
Health Education
PUBLIC SPENDING IN HEALTH AND EDUCATION 1/(% of GDP)
Source: INEI1/ Weighed average.
17,2 16,5 17,3 19,3 20,8 20,3 19,3
1,8 1,73,9
5,24,6 4,2 4,3
0,0
5,0
10,0
15,0
20,0
25,0
30,0
2005 2006 2007 2008 2009 2010 2011
Executed Unexecuted
BUDGET OF THE GENERAL GOVERNMENT 1/(% of GDP)
Source: SIAF, MEF1/ PIM: Modified Institutional Budget.
19,0 18,3
21,3
24,5 25,4 24,5 23,6
20,4
20,6
22,2
28,5
34,7
36,8
45,8
0,0 10,0 20,0 30,0 40,0 50,0
Chile
Argentina
El Salvador
México
Perú
Ecuador
Guatemala
RATE OF TAX EVASION 1/ 2/(Evasion as % of tax revenues)
1/ Estimate. Evasion is defined as less effective theoretical collection.2/ Date of publication of the study: January 2010.
Source: CEPAL
Many thanks
César Luna-Victoria
clunavictoria@rubio.pe
www.rubio.pe
51 945 094 557
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