The Peruvian Tax Authority is denying deductions for intercompany charges when the Peruvian entity is unable to provide supporting documentation for the costs and expenses incurred by the related party that rendered the services for the Peruvian entity. In recent tax audits, the Peruvian Tax Authority has challenged the deductibility of intercompany charges.BackgroundLegislative Decree 1312, in force since 1 January 2017, amended the Peruvian Income Tax Law by incorporating the following requirements for deducting intercompany charges paid to related parties for corporate income tax purposes:The intercompany charges must pass the so-called benefit test, meaning the service rendered to the taxpayer...