The establishment of preferential tax regimes (such as free zones) can lead to elusive practices in tax matters if they do not meet the criteria of substance and transparency established by Action 5 of the BEPS Plan, warned the representatives of the Mission of the Center for Politics and Tax Administration of the Organization for Economic Co-operation and Development (OECD).
In this sense, this mission made up of Ana Rodríguez-Calderón and Laura Stefanelli, experts in Tax Policy from the Center for Tax Policy and Administration of the OECD, exhorted the authorities on the need to make modifications to the Zofratacna law in order to comply with with international standards.
They indicated that if they did not do so, the regime could be described as pernicious, and lead to the application of unilateral measures or sanctions by certain countries, especially the European Union, such as the inclusion of Peru in the black or gray list.
In this regard, the Minister of Economy and Finance, Oscar Graham, stated that Peru needs to adopt legal adjustments in the Zofratacna law, to avoid contingency with other countries for non-compliance with the standards on pernicious tax practices of the OECD.
“With these adjustments, the contingency of Peru being included in exclusion lists will be avoided, which could hinder Peru’s access to the OECD“, said.
He added that in the coming weeks it is expected to present the bill to the Congress of the Republic and hold meetings with legislators to discuss these issues.
Action 5 of the BEPS Project
The members of the OECD Mission also explained the scope and commitments of the standards of Action 5 of the Base Erosion and Profit Shifting Project (BEPS).
This project was implemented by the OECD in 2015 to address the problem of tax evasion, promote improvements in tax regulations and ensure more transparent auditing. Peru made the decision, in 2017, to be part of the Inclusive Framework on BEPS, together with 60 other countries and with the members of the G-20.
“This project has 15 actions, and Action 5 refers to preferential regimes and transparency. As part of the Center for Tax Policy and Administration, we study preferential regimes and seek to prevent unfair competition generated by tax incentives for investment”, detailed Ana Rodríguez-Calderón.
The representative of the mission stated that the OECD considers that, from the fiscal point of view, there is unfair competition in tax regimes that do not pay income taxes. This type of competition is also identified when geographically mobile economic activities are carried out, that is, the companies that carry them out are not physically in the area, region or country that provides tax benefits.
“In the case of Peru, the OECD standards on transparency are met. But from the field of special regimes we have some observations regarding some characteristics of the Tacna – Zofratacna Free Trade Zone that could be potentially harmful and encourage unfair competition at the tax level.”, he narrowed down.
The members of the Mission also affirmed that the OECD does not take measures against countries that do not comply with the standards on preferential regimes.
However, his observations on those that fail to comply with such standards are used by the European Union and other countries to define lists of nations to which restrictive unilateral measures are applied to combat tax regimes considered pernicious, which would affect the activity of the Peruvian companies in their relationship with the rest of the world.
The meeting was held with the Minister of Economy and Finance, Oscar Graham; the Deputy Minister of Foreign Trade, Ana Cecilia Gervasi Díaz; and officials from the Ministry of Foreign Trade and Tourism (Mincetur), the Ministry of Production (Produce), and the Superintendence of Tax Administration (Sunat).
It should be remembered that on June 10, 2022, our country began the accession process with the adoption of the Roadmap, a document that establishes the terms and the process that the country must follow to join the OECD. Peru has been working since 2014 on its adaptation to the OECD guidelines after being invited to participate in the Country Program.