Incentives for private investment
Incentives for private investment
Incentives for private investment
Special Regime for the VAT Early Recovery
Description
It consists of the refund of the General Sales Tax also called Value Added Tax (VAT) transferred or paid in import operations and/or local acquisition of intermediate goods, capital goods, services and construction contracts that are used directly in the execution of the Investment Commitment of a Project, provided that it is in a pre-productive stage equal to or greater than two years.
REQUIREMENTS
- To carry out a Project in any sector of economic activity generating third category income.
- The Project must have an investment commitment of not less than USD 5,000,000.00 (Five Million and 00/100 United States Dollars), not including VAT, as a total investment amount including the sum of all sections, stages or similar, if any. (With the exception of the agricultural sector, which does not have a minimum investment amount).
- The Project must have a pre-productive stage equal to or greater than two years, counted from the start date of the investment schedule.
* If the Project is based on contracts or agreements or authorizations signed or granted by the State under sectoral regulations, the pre-productive stage begins on the date of execution of the corresponding contract, agreement or granting of the corresponding authorization.
A Ministerial Resolution by the relevant sector shall approve the natural or legal persons qualifying for the benefit of the Regime, as well as the goods, services and construction contracts that shall grant the benefit for each project.
BENEFITS OF THE REGIME
- It generates liquidity for the investor in the pre-operational stage, alleviating its financial cost.
- It stimulates the economy by promoting the development of new investments (job creation and the projection of tax revenues).
CONCEPTS TO TAKE INTO ACCOUNT
PROJECT
BENEFICIARY
INVESTMENT COMMITMENT
PRE-OPERATIONAL STAGE
In the case of projects supported by sector contracts, the period from the date of execution of the contract or agreement with the State or the granting of authorization in accordance with sector regulations until the date prior to the start of production operations.
In the case of specific projects, the period from the date of commencement of the investment schedule to the date prior to the commencement of production operations.
SECTOR
Central, regional or local government entity that, within the framework of its competencies, is responsible for entering into and subscribing, on behalf of the central, regional or local government, contracts or agreements or granting authorizations for the concession or execution of works, investment projects, provision of services and other development options.
If the execution of contracts or agreements or the granting of authorizations is not applicable, the central government entity that exercises control over the economic activity referred to in the Project shall be considered the sector.
START OF PRODUCTION OPERATIONS
When the Beneficiary of the Regime makes the first export of a good or service, or the first transfer of a good or service levied with the VAT, resulting from the exploitation of the Project; as well as when they receive any income levied with VAT that constitutes the system of recovery of the investments in the project, including the costs, operation expenses or maintenance carried out.
In Projects executed in stages, sections or similar, the start of productive operations shall be verified as for each stage, section or similar, as determined in the investment schedule.
LEGAL BASIS
PROCEDURES FOR BENEFITING FROM THE SPECIAL REGIME FOR ADVANCE RECOVERY OF THE GENERAL SALES TAX (RERA VAT)
With the publication of Legislative Decree No. 1423 (September 13, 2018) which amended Legislative Decree No. 973, the execution of an Investment Agreement with the Peruvian State is no longer required to qualify for the Special Regime for Advance Recovery of VAT (RERA VAT), being only necessary the issuance of a Ministerial Resolution that qualifies the natural or legal person as a beneficiary thereof.
Nonetheless, the Single Transitory Supplementary Provision of Legislative Decree No. 1423 states that its provisions are applicable to the requests for acceptance that are filed as of its effective date1; in the case of projects whose requests are in process or have already acceded to the Regime, they shall continue to be governed by the rules in force prior to this Legislative Decree.
To request access to this Regime, the following procedures must be followed:
REQUEST FOR ACCESS TO THE SPECIAL REGIME FOR EARLY RECOVERY OF VAT
A request, using the Form included in Annex A of the Regulations, duly substantiated, addressed to the Investor Services Directorate. The request shall have the character of a sworn statement and must be accompanied by the following:
- Descriptive report of the project.
- Proposed project execution schedule, including the identification of stages, sections, or similar components; as well as the period for samples, tests, or trials, if applicable, specifying the quantity, volume, and characteristics of each item. The proposed execution schedule must be detailed on a monthly basis and rounded to whole numbers. It must also be submitted in printed form and as a digital version in Excel format.
- Simple copy of the Sectoral Contract or authorization from the Sector, as applicable.
- Proposed list of capital goods and intermediate goods, indicating the current national subheading and its correlation with the Classification by Use or Economic Destination (CUODE) in each case, according to the codes specified in Annex No. 1 of the Regulations; as well as the list of services and construction contracts indicating the corresponding codes from the International Standard Industrial Classification (ISIC), according to the codes specified in Annex No. 2 of the Regulations; explicitly demonstrating that they are necessary and directly linked to the execution of the Project. The lists must be submitted in printed form and in digital version in Excel format. For these purposes, the Ministry of Economy and Finance recommends reviewing the Explanatory Notes of the ISIC Revision 4.
- Notarized copy of the Public Deed of Incorporation of the Applicant, registered with the National Superintendency of Public Registries – SUNARP, in the case of a legal entity. In the case of an associative contract, a notarized copy of the respective contract must be submitted.
- Notarized copy of the Power of Attorney accrediting the legal representative’s authority to request enrollment in the Regime, where applicable.
FLOWCHART TO ACCESS EARLY VAT RECOVERY REGIME (RERAIGV) LEGISLATIVE DECREE No. 973
Admissibility
ProInversión prepares reports and draft Addendum
Competent Sector Opinion
Publication of Ministerial Resolution
MINISTERIAL RESOLUTION AMENDMENT
DOCUMENTS TO BE SUBMITTED TO PROINVERSIÓN
A request, using the Form included in Annex A of the Regulations, duly substantiated, addressed to the Investor Services Directorate. The request shall have the character of a sworn statement and must be accompanied by the following:
- Proposed execution schedule required for the Project, including the identification of stages, sections, or similar; and, if applicable, the period for samples, tests, or trials, specifying the quantity, volume, and characteristics of such items. The proposed execution schedule must be detailed on a monthly basis and rounded to whole numbers. It must also be submitted in printed form and as a digital version in Excel format.
- Simple copy of the Sectoral Contract Addendum or modification of the Sector’s authorization, or of the Sector’s acceptance of the force majeure or fortuitous event, or, if applicable, a copy of the corresponding request in process, as appropriate.
- Power of Attorney accrediting the legal representative of the Beneficiary.
- In cases where, together with the request for the subscription of the modification of the Ministerial Resolution, a modification of the list of capital goods, intermediate goods, services, and construction contracts is requested, the new proposed list of capital and intermediate goods must additionally be submitted along with the documents previously mentioned, indicating the current national tariff heading and its correlation with the Classification by Use or Economic Destination (CUODE) in each case, according to the codes indicated in Annex No. 1 of the Regulation; as well as the new list of services and construction contracts indicating the Codes of the International Standard Industrial Classification (ISIC) to which they correspond, according to the codes indicated in Annex No. 2 of the Regulation; expressly demonstrating that they are necessary and directly linked to the execution of the Project. The lists must be submitted in printed form and in digital version in Excel format. For these purposes, the Ministry of Economy and Finance recommends reviewing the Explanatory Notes of the ISIC Revision 4.
SPECIAL EARLY VAT RECOVERY REGIME – REQUEST FOR AMENDMENT OF MINISTERIAL RESOLUTION
Admissibility
ProInversión prepares reports on compliance with requirements
Competent Sector Opinion
Publication of Ministerial Resolution
REQUESTS FOR THE EXECUTION OF AN INVESTMENT CONTRACT ADDENDUM TO QUALIFY FOR THE SPECIAL EARLY VAT RECOVERY REGIME
DOCUMENTS TO BE SUBMITTED TO PROINVERSIÓN
A request, using the Form included in Annex A of the Regulations, duly substantiated, addressed to the Investor Services Directorate. The request shall have the character of a sworn statement and must be accompanied by the following:
- Proposed execution schedule required for the project, including the identification of stages, sections, or similar components; as well as the period for samples, tests, or trials, if applicable, required for the project start-up, specifying the start and end dates, designation within the project, quantity, volume, and characteristics of the aforementioned period, as applicable. The proposed execution schedule must be detailed on a monthly basis and rounded to whole numbers. It must also be submitted in printed form and as a digital version in Excel format.
- Where applicable, a copy of the Sectoral Contract Addendum or the modification of the Sector’s authorization, or the Sector’s acceptance of the force majeure or fortuitous event, or, if not available, a copy of the corresponding request in process.
- Power of Attorney accrediting the legal representative’s authority to sign the requested Addendum on behalf of the Beneficiary.
- In cases where, together with the request for the subscription of the Investment Contract Amendment Addendum and the modification of the Ministerial Resolution, an expansion of the list of capital goods, intermediate goods, services, and construction contracts is requested, the new proposed list of capital and intermediate goods must be submitted in addition to the documents previously indicated, specifying the current national subheading and its correlation with the Classification by Use or Economic Destination (CUODE) in each case, as well as the new list of services and construction contracts, substantiating their direct linkage to the project. The lists must be submitted both in printed form and in digital format Excel.
- Deposit receipt for S/ 3,700.00 for processing fee. The deposit must be made at BBVA Banco Continental, in the Account in Peruvian Soles No. 0011-0661-69-0200035423, and the deposit slip must be sent to the email: tesoreria@proinversion.gob.pe. The Interbank Account Code (CCI) is as follows: 011-661-000200035423-69.
SPECIAL EARLY VAT RECOVERY REGIME – REQUEST FOR THE EXECUTION OF AN INVESTMENT CONTRACT ADDENDUM
Admissibility
Opinion of the Competent Sector
ProInversión prepares reports and draft Addendum
Project review by stakeholder
Project review by Sector
Addendum Subscription
Issuance of Ministerial Resolution
If the copies are not legalized, they must be authenticated by a PROINVERSIÓN official. Contact Ms. Roxana Mayanga: rmayanga@proinversion.gob.pe.
DOCUMENTS
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1 The First Final Supplementary Provision of Legislative Decree No. 1423 establishes that it shall become effective as of the first day of the month following the date of publication of the Supreme Decree amending the regulatory provisions. Such Supreme Decree (S.D. No. 276-2018-EF) was published on November 30, 2018, therefore, the provisions of Legislative Decree No. 1423 became effective as of December 1, 2018.