Regulations of the Income Tax Law, approved by Supreme Decree No. 122-94-EF and amending provisions
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Article 2-B.—Financial derivatives entered into for financial intermediation purposes
For the purposes of this Act, a financial derivative is deemed to have been entered into for financial intermediation purposes when a financial institution within the Financial System enters into it as part of its activities to raise funds in any form, and its placement is carried out through any of the transactions permitted under the General Act on the Financial and Insurance Systems and the Organic Act of the Superintendency of Banking and Insurance - Law No. 26702.
Financial derivatives entered into by a company within the Financial System to eliminate, avoid, or mitigate the risk of liabilities related to the acquisition of fixed assets or assets not subject to the credit risk referred to in subsection (h) of Article 37 of the Law, or liabilities incurred that are not related to credit activities, are not considered to be for financial intermediation purposes.”
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Article 2-C.—Financial derivatives entered into on Recognized Markets
Financial derivatives entered into with financial system entities regulated by the General Law on the Financial System and the Insurance System and the Organic Law of the Superintendency of Banking and Insurance, Law No. 26702, whose value is determined by reference to prices or indicators that are publicly available and published in a widely circulated print or electronic medium, the source of which is a public authority or a recognized and/or supervised institution in the relevant market, shall be deemed to have been entered into in the manner referred to in subparagraph (c) of paragraph 14 of the fifty-second transitional and final provision of the Law.
For the purposes of paragraph 14 of the fifty-second transitional and final provision of the Law, the application of prices or indicators referring to an underlying asset of the same or similar nature shall apply when the nature of the assets or property being hedged is the same or similar to that of the underlying asset on which the financial derivative is structured.
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Article 4-A.—Income from Peruvian Sources
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For the purposes of Article 10 of the Law, the following provisions shall be taken into account:
a) The effective term of financial derivatives entered into with domiciled parties, whose underlying asset is linked to the exchange rate of the domestic currency against a foreign currency, as referred to in the third paragraph of subsection d) of said article, is three (3) calendar days.
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Article 29.—Offset of Third-Category Losses
For the purposes of applying Article 50 of the Act, the following provisions shall be taken into account:
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e) Losses of Peruvian source incurred during the fiscal year, arising from derivative financial instruments used for purposes other than hedging, shall be calculated separately and shall be deductible from income of Peruvian source earned during the same fiscal year from financial derivatives used for hedging purposes. If any balance remains, it may only be offset against third-category income in subsequent fiscal years derived from financial derivatives used for purposes other than hedging, in accordance with the provisions of Article 50 of the Law.
The net losses and gains referred to in the third paragraph of Article 50 of the Law correspond solely to the result obtained in the derivatives market and do not include expenses associated with financial derivatives from which they arise.
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Article 34.—Determination of Income from Foreign Currency Transactions
The following rules apply for the purpose of determining income from foreign currency transactions:
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g) In accordance with the provisions of the third paragraph of subsection (a) of Article 57 of the Law, income and losses arising from derivative financial instruments used for hedging purposes whose underlying element is the exchange rate shall affect the determination of income tax as follows:
- They will affect the value of inventories, fixed assets, or other permanent assets, whether in transit or on hand, provided they arise from related and fully identifiable foreign currency liabilities.
- In cases other than those indicated in the preceding paragraph, they shall be recognized in the fiscal year in which they are accrued.