Last Saturday, the Government of Peru approved amendments and regulatory rules of a Law that encourages donation of food and eases its transportation in situations of natural disasters.
Amendments to the Regulation for General Sales Tax (IGV), Selective Consumption Tax (ISC) and Custom Duties Exemption on Donations were passed through Supreme Decree 054-2017-EF.
Likewise, the Executive approved regulatory standards embedded in Law 30498, which promotes donation of food and eases transportation of donations in situations of natural disasters.
Tax incentives applicable to donations
Donations of goods and/or services are exempted from Income Tax and General Sales Tax (IGV) if delivered in situations of natural disasters. (According to Law No. 30498 – which promotes donations in situations of natural disasters).
Benefits:
a. Donation of goods and provision of free services can be deducted as an expense for income tax purposes.
b. No General Sales Tax (IGV) shall be charged on delivery of free goods.
c. General Sales Tax (IGV) credit for donated goods and/or services shall remain available.
Goods and services
Definitions according to Supreme Decree No. 030-2017-PCM:
• Good: non-perishable food, medical material, clothing, toiletries and cleaning products, equipment and machinery, building materials, among others.
• Service: medical services, transportation, catering, conveyance and storage, etc.
Keep in mind:
• Donations should address emergency and provide immediate assistance to populations affected by natural disasters.
• These benefits only apply to donations or services rendered during a declared state of emergency.
(END) JJN/JJN/RMB
Published: 3/25/2017