Tax and financial measures associated with COVID-19
13 May 2020
Essential activities that continue to operating during the State of Emergency: The following workers continue to working:
- From the public sector that provides services necessary to care for actions related to the health emergency produced by COVID-19.
- Those that produce, supply and distribute food and medicine.
- Those that assist older adults, girls, children, dependent adolescents and people with disabilities.
- Those that produce, store, transport and sell fuel.
- Those that work in a call centre
- Those that work in financial institutions, insurance and pensions, as well as in their complementary and related services.
- Those that work in the media.
- Police and military, and those working in activities similar to those described.
Remote work: Public and private sector employers were empowered to modify the place of service provided for all of their subordinate workers (who do not engage in activities considered essential during the State of Emergency) to the places where they are doing their home isolation during the period of the health emergency.
Perfect suspension of work: It implies the temporary cessation of the worker’s obligation to provide the service and of the employer to pay the respective remuneration, without termination of the employment link, applicable to private sector enterprises that cannot implement the remote mode of work or apply the work license with perceiving remuneration due to the nature of their activities (i.e. not able to reintegrate working hours any longer) or the level of economic impact caused by the health emergency caused by COVID 19.
Restarting economic activities: The State approved the restart of economic activities gradually, which consists of four (04) phases for their implementation, and provided that prior to this restart, entities, companies or natural or legal persons must perform the following actions:
- Develop the COVID-19 Surveillance, Prevention and Control Plan at Work, considering the Guidelines for the Surveillance of Workers’ Health at Risk of Exposure to COVID-19, as well as sectorial protocols.
Phase 1 of the resumption of activities begins in May 2020 and includes the following economic activities: Mining and industry, construction, services and tourism, and commerce.
- Register the Plan in the Integrated System for COVID-19 (SICOVID-19) of the Ministry of Health for approval.
- As obtained authorization then it can be restarted activities
In order to counteract the negative economic effects caused by the national state of emergency as a result of Covid-19, the following measures are available:
- State-guaranteed loans: The National Government created the REACTIVA PERU program to provide guarantees that allow companies access to working capital credits of up to 36 months term at preferential rates so that they can meet payments and short-term obligations to workers and service suppliers.
- Subsidy for company payrolls: In order to achieve the preservation of the employment of private sector workers, it is provided that the employer exceptionally receives a subsidy of 35% for the monthly gross remuneration for each worker when this remuneration is not higher than S/. 1, 500.00.
- Suspension of workers’ contribution to AFPs (private pension entity): The obligation of employers to withhold and pay the planned contribution to the Workers’ Private Pension System for April was exceptionally suspended.
- Voluntary Withdrawal of 25% AFP: Voluntary and extraordinary withdrawal was authorised up to 25% (twenty-five percent) of all of its accumulated funds in its individual capitalisation account, with a minimum and maximum withdrawal amount, equivalent to 1 ITU (one tax unit which is 4,300 Soles equivalent to US$ 1,280) and 3 ITU (three tax units), respectively.
- Monetary subsidy for vulnerable populations: It was approved to provide monetary subsidies for vulnerable households in conditions of extreme poverty or poverty.
Compulsory social isolation during the State of National Emergency has a major impact on the national economy, so the State in order to reduce it has provided for the following tax measures:
- Faculty of the Tax Administration not to sanction tax debtors: It was provided that during the State of National Emergency, the commission of tax violations incurred by tax debtors is not administratively punished.
- Modification of default interest rates: It is approved to reduce the default interest rates applicable to tax debts in domestic and foreign currency, corresponding to taxes administered and /or collected by the National Superintendence of Customs and Tax Administration.
- Extension of the taxable carry forward loss-taking period under system (a) for the loss compensation utilisation against future annual taxable profits as provided for in Article 50 of the Law: Total taxable net losses per determination in the annual income tax (third category) for Corporations of Peruvian source to be established in the year 2020 financials shall be offset by year-to-year, until their amount is exhausted, in the five (5) immediate years subsequently, counted from the fiscal year 2021.
The uncompensated balance at the end of that period may not be computed in subsequent years.
This measure applies to taxpayers domiciled in the country to generate third-grade income tax that they have elected or will elect for system (a).
- Suspension or decrease of income tax payments from April to July for the fiscal year 2020: Income tax taxpayers may exceptionally reduce or suspend payment of Payments on account for the periods of April, May, June and/or July of the fiscal year 2020.
The suspension or reduction of payment for the payments on account of the Income Tax for those periods depends on the decrease in revenue earned in the months of April, May, June and/or July of the fiscal year 2020 financial year to those obtained in the same month of the fiscal year 2019.
If there is no decrease, the payment on account of the Income Tax for these periods is calculated in accordance with section 85 of the Income Tax Act.
- Creation of the Bureau of Virtual Parties of the National Superintendency of Customs and Tax Administration (SUNAT, the Peruvian Tax Administration): The Bureau of Virtual Parts of SUNAT was created in order to guarantee the exercise of the rights of taxpayers, whose objective is to facilitate the presentation of documents in a virtual way, as well as to consult the status of the files linked to those documents through the SUNAT Portal.
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