SUNAT analyzes the case of a non-domiciled holding company (Company “A”) which, within the framework of a dissolution, liquidation and extinction process carried out abroad, distributes among its non-domiciled shareholders its remaining assets, consisting mainly of: (i) a financial asset with no connection to Peru and (ii) 55% of the shares of a non-domiciled legal entity (Company “B”) which, in turn, owns 75% of the shares of a company incorporated in Peru (Company “C”)
In this regard, the query is whether, in such case, an indirect transfer of shares of Company “C” has occurred, in accordance with the provisions of subsection e) of article 10 of the Income Tax Law.
Indirect transfer of shares and Peruvian-source income
The Income Tax Law establishes that non-domiciled subjects are taxed only on their Peruvian-source income, which includes income obtained from the indirect transfer of shares of companies domiciled in the country.
In this regard, an indirect transfer is configured when shares of a non-domiciled company are transferred which, in turn, owns shares of a Peruvian company, provided that the conditions set forth in subsection e) of article 10 of the LIR are met.
Concept of transfer and requirement of valuable consideration
SUNAT recalls that, for tax purposes, transfer implies a transfer of ownership for valuable consideration.
Likewise, it specifies that valuable consideration exists when the advantages granted to one of the parties arise from obligations performed or assumed by the other party. Conversely, a gratuitous transaction is characterized by one of the parties obtaining a benefit without assuming any consideration.
Therefore, for a taxable transfer to exist, the existence of reciprocal obligations involving a transfer of assets for valuable consideration must be verified.
Nature of the distribution of remaining assets in a liquidation
SUNAT explains that the process of dissolution, liquidation and extinction of a company comprises various stages aimed at ending its legal existence. During liquidation, the company’s assets are first allocated to the payment of corporate debts and, subsequently, if any remainder exists, to its distribution among the shareholders.
In this context, it specifies that the distribution of the remaining assets does not constitute a transfer for valuable consideration, since the shareholders do not perform nor undertake to perform any obligation before the company.
On the contrary, such distribution responds solely to the right of the shareholders to receive the proportional share of the remaining assets prior to the extinction of the company.
¿Does the distribution of shares in a liquidation constitute an indirect transfer?
No. SUNAT concludes that the transfer of shares of Company “B” carried out by Company “A” in favor of its shareholders, within the framework of its liquidation and extinction process, does not qualify as a transfer for purposes of the Income Tax Law.
Consequently, such transaction also does not constitute an indirect transfer of shares of Company “C” pursuant to subsection e) of article 10 of the LIR.
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