Controversies Regarding Commodity Market Valuation in Peru: Operational Inconsistencies and Transfer Pricing Challenges

Peru has adopted a transfer pricing regime for controlled transactions regarding commodities, mandating the use of a variant of the comparable uncontrolled price method. Though influenced by OECD and the BEPS Action Plan, its local particularities have sparked disputes in audits. Drawing on audit experience, this article offers a critique and identifies three recurring conflicts: (i) automatic substitution of the quotation date/period for formal communication non-compliance; (ii) impossibility to support each price component; and (iii) shortcomings in comparability analysis tied to the tax authority’s current stance. These features can materially distort arm’s length values and significantly magnify tax adjustments.