New Tax Court ruling rejects transfer pricing adjustment in scenario with loss-making comparables

In the resolution of the Tax Court 02387-01-2023, the transfer pricing adjustment made by SUNAT in a transaction of purchase of goods and spare parts between a Peruvian company and its related parties has been rejected. In this process, it is evident that SUNAT did not accept the application of the Resale Price Method (RPM) proposed by the taxpayer or the adjustment for the geographical market, and additionally excluded three companies from a set of comparables solely because they had operating losses in the year under analysis, for which reason it proceeded to determine the corresponding adjustment by applying the Net Transactional Margin Method (NTM). However, SUNAT did not demonstrate that the expenses associated with the restructuring had a significant impact on the loss for the year under analysis and used financial data from 2013 to support its exclusion, when the study submitted by the taxpayer was based on financial data from 2014.
For this reason, the Tax Court decided to uphold the taxpayer, highlighting the importance for SUNAT to carry out a more exhaustive analysis when questioning a comparable third party with losses, in order to determine whether or not it can be used as a comparable, taking the elements or circumstances that best reflect the economic reality of the operation.


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