According to Article 9 j) of the Income Tax Law and Article 4-A of its Regulations, “Technical Assistance” is taken to mean as any independent service, whether provided from abroad or local entities, whereby the provider undertakes to use his skills through the application of certain procedures, arts, or techniques, to provide not patentable specialized knowledge, which are necessary for the production process, marketing, services provision, or any other activity the user performs.
In this regard, it is convenient to consider the Tax Administration pronouncements and the Tax Court regarding the compliance with this requirement:
“Thus, for a service to qualify as technical assistance, the service provided must have such a connection degree with the production process, marketing, services rendering, or any other activity carried out by the user, that is indispensable for the development of such process. The user would not be able to develop his activity without the provision of such service, a factor that is essential to consider the service as technical assistance”.
“In other words, the consulting or advisory services rendered by non-domiciled entities shall be considered technical assistance services when they enable the user to develop its production process, marketing, services provision, or any other activity that generates income for such user, not damaging the compliance with the other characteristics outlined in the regulatory standards”.
The Tax Administration has pointed out through Report N°. 139-2013-SUNAT/4B0000, that although Report N°. 168-2008-SUNAT/2B0000 states that in order for a service to qualify as technical assistance, it must be indispensable for the development of the production process, marketing, services provision, or any other activity the user performs. If the user does not have such a service, it would be impossible for him to develop his activity, not being able to emphasize that the service provided must have a substantial degree of connection with the processes in question.
Therefore, if the referred services meet the other elements that characterize the technical assistance concept, they qualify within such concept”.
A technical assistance service qualifies as necessary, from the foregoing above, if the service subject matter is part of the Company’s business line and allows the development of the user’s activities, i.e., it allows the maintenance and growth of the income-generating activity of the service user. Note the services intended to improve, modernize, renew, develop, or optimize the production process, marketing, service rendering, or any other activity the user carries out (or a stage thereof) and those whose processes could not be developed, also qualifying as technical assistance.
Likewise, the Income Tax Law establishes certain services in which, in any case, technical assistance is presumed to exist, even when the mentioned requirements above are not met.
Finally, it is provided that technical assistance also includes the training to persons for the application of specialized knowledge.
It should be noted the rate to be applied in the case of services rendered by a non-domiciled taxpayer for technical assistance services is 15%, as determined by paragraph f) of Article 56 of the Income Tax Law.