Executive modifies the Income Tax Law and the Tax Refund Law

By means of an emergency decree, the Executive Branch modified the Income Tax Law, which establishes the right of natural persons to automatic return of taxes paid or withheld in excess.

It also amended the Legislative Decree that regulates the obligation of legal persons or legal entities to inform the identification of final beneficiaries. In this way, various aspects in tax matters are required and perfected.

In the case of the Income Tax Law (IR), the rule provides for a year to extend, until December 31, 2020, the exemption of the payment of this tax to non-profit foundations and associations whose instrument The constitution includes exclusively one or more of the following purposes: charity, social assistance, education, cultural, scientific, artistic, literary, sports, political, trade or housing.

In addition, it is provided that the National Superintendence of Customs and Tax Administration (Sunat) publish annually on its institutional website the list of foundations and nonprofit associations that claim to be exempt from the IR of the third category, as well as the amount global to which this exemption ascends.

“This action is part of the transparency guidelines that the Ministry of Economy and Finance (MEF) has been promoting and will allow the corresponding supervision and supervision by the citizens about the beneficiaries of the exonerations,” said the MEF.

Likewise, it was provided that the procedure of ex officio return in the case of natural persons who receive income of fourth or fifth categories be completed after the deadline for submitting the annual sworn declaration of income tax.

In the same vein, in order to expedite the collection of the amounts to be returned to the taxpayers, it is established that the ex officio refund will be made using the account credit or any other mechanism that is approved by supreme decree endorsed by the minister of Economy and Finance.

However, the use of the Financial System Payment Order (OPF) is maintained in the case of returns at the request of the party, that is, when the taxpayer himself expressly opts for this form of return.

Income tax
The Emergency Decree also designates distributors of mutual fund participation fees as income tax withholding agents, and establishes in which cases it is appropriate for said subjects to carry out the corresponding withholding.

The quota distributors are legal persons to whom the Superintendence of Securities Market (SMV) authorizes to perform the functions of promotion or placement of quotas of one or more mutual funds.

They are operators that could boost the mutual fund market, as part of the financial inclusion process, being intermediaries between the beneficiaries and the mutual fund management companies (SAFM).