2.3. SUNAT Reports | International Taxation

SUNAT REPORTS ON FINANCIAL DERIVATIVES

Report No.	Summary
157-2008-SUNAT/2B0000	Although the requirement of a reasonable contribution to classify the financial derivative as a hedging financial derivative has been incorporated into the Consolidated Text of the Income Tax Law by Legislative Decree No. 970, the provisions introduced into the regulatory framework by Supreme Decree No. 219-2007-EF to measure the effectiveness of a financial derivative are applicable only for fiscal years 2008 and thereafter. For the purposes of calculating the effectiveness ratio, the current value of a financial derivative traded on a centralized platform that qualifies as a recognized market is the value established in that market based on the price or value of the underlying asset giving rise to the financial derivative as of December 31 of each fiscal year or at the time any of the events specified in the second paragraph of subsection (a) of Article 57 of the Consolidated Text of the Income Tax Law occurs, and not the transaction value the financial derivative would have if it were transferred. For the purposes of calculating the effectiveness ratio, the value of the financial derivative set forth in the executed contract is the price or value of the underlying asset agreed upon by the parties, and not the value at which the financial derivative would be traded if it were transferred. Any legal relationship agreed upon regarding future assets shall be considered a financial derivative provided it meets the characteristics set forth in the definition contained in Article 5-A(a) of the Consolidated Text of the Income Tax Law.
069-2011-SUNAT/2B0000	Income derived from the use of financial derivatives intended to hedge risks associated with the conduct of activities covered by the benefits of Law No. 27360 must be considered part of the annual income from such activities. Otherwise, if the purpose is different, income derived from the use of financial derivatives must be included as part of the annual income arising from other activities.
051-2014-SUNAT/4B0000	For the purposes of the income tax payments on account referred to in Article 85 of the Law, income arising from financial derivatives entered into by companies in the financial system for the purpose of financial intermediation must be considered part of the “net income” referred to in that provision.
121-2014-SUNAT/5D0000	Exchange rate differences arising from the conversion into local currency of foreign currency balances related to a liability arising from the issuance and placement of bonds denominated in Swiss francs must be recognized as a gain or loss in determining taxable income for the fiscal year in which they occur, using the weighted average selling exchange rate published by the SBS for that foreign currency, in accordance with the provisions of subsection (d) of Article 61 of the Income Tax Law and subsection (b) of Article 34 of its Regulations, even if the liability, once determined, is partially hedged through the use of a cash flow hedge derivative (IFD) that fixes an exchange rate for the purpose of mitigating or eliminating foreign exchange risk.
0125-2015-SUNAT/5D0000	In the case of foreign exchange derivatives intended to hedge liabilities denominated in foreign currency, for tax purposes, income and losses arising from such derivatives must be recognized when any of the events described in Article 57(a) of the Income Tax Law occurs. Expenses related to foreign exchange derivatives, whether or not for hedging purposes, may be deducted in determining third-category net income, provided they comply with the accrual principle and to the extent that they have not been entered into with residents or permanent establishments located in countries or territories with low or no taxation.
080-2017-SUNAT/5D0000	Subsection (a) of Article 57 of the Income Tax Law provides that third-category income shall be deemed to have been earned in the fiscal year in which it accrues. The regulation further provides that, in the case of financial derivatives, income and losses shall be deemed to have accrued in the fiscal year in which any of the following events occurs: 1. Physical delivery of the underlying asset. 2. Cash settlement. 3. Closing of positions. 4. Abandonment of the option on the expiration date without exercising it. 5. Assignment of the contractual position. 6. Date specified in the financial swap contract for the periodic exchange of cash flows.
088-2019-SUNAT/7T0000	In the case of financial derivatives that consider the foreign exchange rate as their sole underlying asset, the amendment to the accrual basis provided for in Article 57 of the Income Tax Law (LIR), introduced by Legislative Decree No. 1425, applies not only to contracts entered into after the effective date of the latter regulation but also to the pending consequences of those contracts entered into prior to its effective date, namely January 1, 2019
147-2019-SUNAT/7T0000	The financial derivative entered into by an entity domiciled in the country that is not authorized to maintain accounting records in foreign currency, for the purpose of mitigating the foreign exchange risk that would arise from having a receivable in local currency and preparing its financial statements in a different functional currency, does not qualify as a hedging financial derivative.
000071-2024-SUNAT/7T0000	In the case of financial derivative contracts: i) that consider the foreign exchange rate as their sole underlying element; ii) entered into prior to the amendment of Article 57 of the Income Tax Law (LIR), introduced by Legislative Decree No. 1425, effective as of January 1, 2019; and, iii) whose term expires on a date after December 31, 2018, for income tax purposes, the following must be observed: a. With respect to such contracts, if none of the six allocation scenarios provided for in Article 57 of the Income Tax Law—which were then applicable to these foreign financial derivatives—were met as of January 1, 2019, the accumulated accounting results generated prior to January 1, 2019, shall not be recognized as income or a loss for tax purposes in the 2019 tax year or subsequent years. b. Accounting results generated on or after January 1, 2019, must be recognized as income or a loss for tax purposes at the end of each taxable year, beginning in 2019.