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![List of high-risk tax schemes Peru: The tax authorities expands the list under GAAR](https://www.ecovis.com/global/wp-content/uploads/2024/08/NL0524_PER.webp)
List of high-risk tax schemes Peru: The tax authorities expands the list under GAAR
09.08.2024On 9 July 2024, the Peruvian tax authority published an updated version (third version) of the list of high-risk tax planning models, which now includes 24 arrangements that can be challenged under the Peruvian general anti-avoidance rule. Taxpayers involved in such transactions must expect these structures to be challenged. The Ecovis experts explain the details.
The Peruvian tax authority published the first version in February 2020 with five initial tax planning situations (high-risk systems) that would trigger the application of the Peruvian general anti-avoidance rule (GAAR). 13 additional high-risk structures were added in October 2022. The third version, which is now in force, contains 13 regulations from the previous versions and eleven new structures.
We offer expert assistance in navigating these high-risk tax regimes.Octavio Salazar Mesias, Socio, ECOVIS Perú, Lima, Peru
The list of 24 high-risk structures
- Deduction of payment of royalties in a brand/trademark use assignment scenario
- Transfer of a Peruvian company using a trust or similar entity
- Re-domiciliation of a company and use of Double Tax Treaties
- Assignment of trademarks and capitalisation of credits
- Management contracts and management fees
- Assignment of a concession of an extractive industry (mining) with hidden payments for transfer of shares
- Sale and further repurchase of an automobile under a cancellation of contract scenario
- Direct transfer of Peruvian shares via capital contribution and subsequent capital reduction structure
- Artificial use of preferential tax regimes
- Loan via financial leasing structure
- Intermediation in the sale of minerals through an entity without economic substance
- Nonprofit entity making payments to an overseas supplier
- Transfer of real estate to the shareholder and further lease of said real estate by the shareholder to the company
- Transfer of real estate under a demerger scheme
- Hidden loan and accrual of interest at fair market value
- International lease through a conduit company with no economic substance
- Disposal of shares with the appearance of being carried out by means of a stock exchange
- Value-added tax (VAT) exemption on sale of books
- Transfer of dividends through an entity resident in a jurisdiction of the European Union
- Indirect transfer of intangible assets
- Back-to-back credit between related parties using a foreign bank
- Transfer of research and development (R&D) functions to foreign subsidiary for exploitation of intangible assets
- Commission agent versus distributor
- Import and distribution of goods considered as services
Taxpayers engaging in any of the above activities could be subject to challenge under Peru’s GAAR.
For further information please contact:
Octavio Salazar Mesias, Socio, ECOVIS Perú, Lima, Peru
Email: octavio.salazar@ecovis.com.pe
![Property tax Poland: Amendments to the according tax regulations](https://www.ecovis.com/global/wp-content/uploads/2024/08/NL0524_POL.webp)
Property tax Poland: Amendments to the according tax regulations
07.08.2024The Ministry of Finance has published a draft law amending the Law on Local Taxes and Fees which will, among others, also affect the regulations on property tax. The law is expected to come into force on 1 January 2025. The Ecovis experts are familiar with the changes and explain the potentially far-reaching consequences.
Background
The purpose of the amendments is to clarify and eliminate interpretative doubts concerning the current regulations and ensure their correct application. This is a consequence of a ruling by the Constitutional Tribunal of 4 July 2023 (SK 14/21), in which the Tribunal ordered the introduction of a definition of a non-building structure to the Law on Local Taxes and Fees (of which property tax regulations are a part) which does not refer to the provisions of any other laws, including construction law.
Scope of the changes
The changes in the regulation proposed by the Ministry of Finance are now much more extensive than those resulting from the ruling by the Constitutional Tribunal.
As a result, taxation may cover, among others, photovoltaic farms, tanks and silos, installations and equipment of various types, or transformer stations, i.e. elements that have so far remained outside the “interest” of property tax regulations.
Additional changes of concern are:
- The introduction of an annex that lists objects defined as a non-building structure
- A return to the principle of taxing non-building structures together with installations and equipment, if they constitute a technical and functional whole
- The introduction of a definition of “permanent connection to the land,” the concept of which was based on a line of jurisprudence abandoned some time ago by the Supreme Administrative Court.
We can help you in determining whether the announced changes may affect your company.Hubert Kaczyński, Tax Advisor, ECOVIS Poland, Warsaw, Poland
Practical issues
The seemingly straightforward amendments to the regulations have given rise to a number of interpretative doubts. They may also violate the neutrality of these changes for taxpayers, contrary to the assurances of the Ministry of Finance that the amendments are not intended to increase the tax burden.
The proposed amendments are important because the basis for taxation of a non-building structure and parts thereof used to conduct economic activity, is its overall value used as the basis for calculating depreciation, not reduced by depreciation. The tax rate is 2% per year. Thus, if the definition of a non-building structure is extended, then the tax burden is greater.
In connection with such far-reaching changes, it seems that the scope for interpretation by the tax authorities and administrative court judgements issued on the basis of the existing regulations may also be severely restricted.
These concerns have also been highlighted by other ministries, industry and business organisations and other entities in comments on the proposed changes as part of inter-ministerial consultations.
As the draft law is still in the consultation phase, its final shape is still unknown. However, the number and scope of the comments submitted allow us to assume that the proposed changes to the regulations will be significant.
For further information please contact:
Hubert Kaczyński, Tax Advisor, ECOVIS Poland, Warsaw, Poland
Email: hubert.kaczynski@ecovis.pl
![Ecovis Newsletter ESG / Summer 2024](https://www.ecovis.com/global/wp-content/uploads/2024/08/esg_newsletter.webp)
Ecovis Newsletter ESG / Summer 2024
06.08.2024In the last few months, the EU has made significant advancements in ESG (Environmental, Social, and Governance) regulations, particularly with the adoption of the European Sustainability Reporting Standards (ESRS) under the Corporate Sustainability Reporting Directive (CSRD). These standards will apply to a broad range of companies, including large EU companies, EU-listed small and medium-sized enterprises (SMEs), and certain non-EU companies operating within the EU.
Ecovis is ready to support you in all areas related to ESG and consulting. Click here to send us an email and start assessing your readiness for your ESG journey.
EFRAG and ISSB Release Interoperability Guidance
EFRAG and the ISSB have issued guidance to improve interoperability between the European Sustainability Reporting Standards (ESRS) and IFRS Sustainability Disclosure Standards (S1 & S2). This guidance aims to streamline the reporting process for entities adhering to both frameworks, focusing on climate-related disclosures and general sustainability information. It includes detailed mapping between specific standards, demonstrating their alignment and facilitating efficient data collection, governance, and control.
The document outlines how companies can comply with both sets of standards by providing a comprehensive comparison of their requirements, supporting greater transparency, comparability, and accountability in sustainability reporting.
Recommendation
Organizations should leverage this interoperability guidance to simplify their reporting processes, ensuring they meet both ESRS and ISSB standards efficiently. By doing so, they can improve data accuracy, reduce reporting burden, and enhance their sustainability transparency and accountability. This approach will also help companies comply with evolving global and regional sustainability reporting mandates.
ACCA Highlights on Sustainability Reporting
The ACCA underscores the significance of sustainability reporting for all organizations, emphasizing its role in transparency, regulatory compliance, and stakeholder trust. Key elements include the integration of financial and sustainability data, stakeholder engagement, and leveraging technology for accurate data management and reporting.
Key Components and Recommendations
- Material Issues: Address significant ESG issues impacting stakeholders and business decisions.
- Data Collection: Establish robust processes for accurate data collection and verification.
- Technology: Implement suitable technology to efficiently manage and report sustainability data.
- Stakeholder Engagement: Maintain clear communication to build trust and support strategic decisions.
Specific Guidance for SMEs
ACCA advises SMEs to view sustainability reporting as a strategic advantage. Integrating sustainability into business strategies can attract investment, enhance reputation, and retain talent. SMEs should follow a structured reporting cycle and utilize existing frameworks for guidance.
Action Steps
- Utilize Established Frameworks: Guide data collection and reporting processes.
- Engage Stakeholders: Regularly communicate sustainability efforts and outcomes.
- Invest in Technology: Adopt appropriate technology solutions for data accuracy.
- Continuous Improvement: Regularly review and improve reporting practices.
These steps will help organizations enhance their sustainability reporting, ensuring compliance and fostering stakeholder trust.
Committee of European Auditing Oversight Bodies (CEAOB) Launches Public Consultation
The CEAOB enhances EU-wide audit oversight by coordinating national audit oversight bodies and ensuring consistent application of EU audit legislation.
In response to a request from the European Commission, the Committee of European Auditing Oversight Bodies (CEAOB) has developed draft non-binding guidelines for providing limited assurance on sustainability reporting.
The committee is composed of national representatives and observers from the European Securities and Markets Authority (ESMA), European Banking Authority (EBA), and European Insurance and Occupational Pensions Authority (EIOPA).
Recommendation
Organizations should engage with the CEAOB’s consultations and guidelines to ensure compliance with evolving EU audit and sustainability reporting standards. This proactive approach will aid in meeting regulatory requirements and enhancing audit quality.
ESMA’s Guidance on European Sustainability Reporting Standards (ESRS)
The European Securities and Markets Authority (ESMA) has issued a comprehensive statement on the first application of the European Sustainability Reporting Standards (ESRS). These standards are integral to the Corporate Sustainability Reporting Directive (CSRD) and aim to enhance the consistency and quality of sustainability information across the EU. ESMA’s guidelines focus on ensuring that sustainability reports are comparable, reliable, and meaningful for investors and stakeholders.
Key Points of ESMA’s ESRS Statement
- Consistency and Quality: The ESRS aims to promote high-quality disclosure of material sustainability information, aligning with the broader objectives of the CSRD and other EU legislation.
- Technical Recommendations: ESMA has provided technical input to refine the standards, addressing issues such as consistency, terminology, and materiality assessment processes.
- Interoperability: The standards are designed to be interoperable with global sustainability reporting frameworks, ensuring that European businesses can meet both EU and international requirements.
Next Steps and Implementation
ESMA will continue to monitor the application of these standards and issue further guidance as necessary. The initial set of ESRS has been adopted by the European Commission and will come into force following the non-objection period of the European Parliament and Council.
Recommendation
Organizations should familiarize themselves with the ESRS and integrate these standards into their reporting processes. Adherence to these guidelines will increase transparency, improve investor confidence, and support the transition to a sustainable economy.
New tool to help financial institutions assess climate-related risks, aims to integrate climate risks into short term strategies.
The UNEP Finance Initiative (UNEP FI) and the National Institute for Economic and Social Research (NIESR) have introduced new short-term climate scenarios to aid financial institutions in assessing climate-related risks. These scenarios focus on the immediate impact of climate change commitments on financial planning, addressing a gap typically filled by long-term analyses. The report includes a visualization tool to analyze macroeconomic, transition, and physical risk shocks. This initiative supports asset managers, insurers, bankers, and investors in incorporating climate risks into their short-term strategies.
Recommendation
Financial institutions should utilize these short-term scenarios to enhance their risk assessment frameworks, ensuring they are prepared for immediate climate-related shocks. This proactive approach can improve resilience and strategic planning.
ESMA Proposes New Measures for Sustainability Reporting: GLESI to standardize EU-wide
The European Securities and Markets Authority (ESMA) has introduced the Guidelines on Enforcement of Sustainability Information (GLESI) to standardize the way sustainability reports are supervised across the EU. The GLESI aim to ensure that corporate sustainability disclosures are consistent, transparent, and reliable, reinforcing the EU’s position as a leader in green finance. These guidelines align with the European Sustainability Reporting Standards (ESRS), which set the criteria for corporate sustainability reporting. ESMA will monitor compliance from 2025 and release further recommendations by the end of 2024.
Recommendation
Follow and prepare for the implementation of sustainability reporting.
EFRAG’s Guidance on Materiality Assessment
EFRAG’s guidance document on materiality assessment offers a framework for identifying relevant sustainability information. It provides detailed methodologies for determining material sustainability topics based on their impact on the environment, society, and governance, as well as their influence on stakeholders’ decisions. The guidance aims to help companies enhance the transparency and consistency of their sustainability reporting.
Recommendation
Organizations should adopt EFRAG’s materiality assessment methodologies to ensure their sustainability reports accurately reflect significant impacts and meet stakeholder expectations.
EFRAG Guidance on Value Chain Reporting
EFRAG’s guidance on value chain reporting provides a framework for companies to disclose sustainability impacts throughout their value chains. It outlines methodologies for identifying and assessing significant value chain stages and their associated sustainability impacts, ensuring comprehensive and transparent reporting.
Recommendation
Organizations should integrate EFRAG’s value chain reporting guidelines to enhance transparency and accountability, ensuring they capture and communicate the full scope of their sustainability impacts.
EFRAG Issued Data Points and Guidance on ESRS Data Points
EFRAG’s explanatory note on the list of ESRS data points provides detailed explanations of the required data for sustainability reporting under the European Sustainability Reporting Standards (ESRS). It includes descriptions of each data point, its relevance, and how it should be measured and reported, aiming to ensure clarity and consistency in sustainability disclosures.
Recommendation
Organizations should use this guidance to accurately report ESRS data points, enhancing transparency and compliance with EU sustainability reporting standards.
Six Ways for Boards to Lead the Sustainability Transition
Accountancy Europe, in collaboration with Chapter Zero Brussels, ECIIA, and ecoDa, released “ESG Governance: Six ways for boards to lead the sustainability transition” in 2024. This publication is based on interviews with board members and sustainability experts about their experiences in implementing sustainability transition within their organizations. The paper offers advice and examples to support and inspire other board members, serving as a complement to the earlier publication “ESG Governance: questions boards should ask to lead the sustainability transition”
Recommendation
Recommend reading “ESG Governance: Six ways for boards to lead the sustainability transition” to gain practical insights and real-world examples from experienced board members and sustainability experts. This document can serve as a valuable resource for understanding effective strategies and best practices for implementing sustainability transition within organizations. Additionally, it can provide actionable advice and inspiration for board members looking to enhance their governance and leadership on sustainability. To maximize its benefit, consider how the guidance and examples provided can be tailored and applied to your specific organizational context and sustainability goals.
Ecovis is ready to support you in all areas related to ESG and consulting. Click here to send us an email and start assessing your readiness for your ESG journey.