As of 16 September 2026, the Peruvian Tax Tribunal (Tribunal Fiscal) issued a significant resolution clarifying the deductibility of interest expenses arising from leveraged acquisitions followed by reverse mergers, commonly known as debt push-down structures. The ruling establishes that taxpayers must demonstrate, from the outset, that the financing arrangement responds to a genuine business purpose and not merely to tax-driven interest allocation. The Tribunal emphasized that the mere formal compliance with thin-capitalization ratios is insufficient; the economic substance of the transaction, including the capacity of the merged entity to generate taxable income to absorb the interest, will be scrutinized. This decision reinforces the application of General Anti-Avoidance Rule (GAAR) principles under Peru’s Tax Code and signals heightened scrutiny of acquisition financing structures.
Key Takeaways
- Business Purpose Test Mandatory: Companies executing leveraged buyouts with subsequent reverse mergers must document and prove a valid economic rationale beyond tax efficiency to secure interest deductibility.
- Substance Over Form Approach: The Tribunal will look through the formal structure to assess whether the post-merger entity has sufficient operational capacity to support the debt service, rejecting artificial debt push-downs lacking economic substance.
- Increased Compliance Burden: Taxpayers should enhance transfer pricing and financing documentation contemporaneously, preparing for potential challenges from SUNAT (Peruvian Tax Administration) during audits of acquisition-related interest deductions.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement