Branches in Peru and the application of the Decision 578 from the Andean Community of Nations

Abstract

This article analyzes the treatment that applies according to the Decision 578 of the Andean Community of Nations (CAN), “Regime to avoid the double taxation and prevent tax evasion”, to the branches located in Peru of companies domiciled, for tax purposes, on any of the other countries that are members of CAN to establish the treatment that applies to such entities according to the Peruvian tax law. This analysis considers the implications generated by Decision 578 on such branches, taking into consideration the jurisprudence of the Peruvian Tax Court (TF) and the comments of the specialized doctrine; which allowed us to conclude that these branches are considered as taxpayers in Peru but only regarding the income obtained in this country, therefore the income obtained abroad is considered as non-taxable in Peru, and on the matter of the distribution of dividends the conclusion is that there is no risk of double taxation because such income is considered as non-taxable on the country where the mother company is domiciled.