As previously reported, Legislative Decree No. 1424 of 2018 introduced new thin capitalization and interest deduction restriction rules in Peru. With respect to thin capitalization, the Decree provided that from 1 January 2019 to 31 December 2020, the thin capitalization rules (3:1 debt-equity) applied in relation to both related and unrelated party debt (previously, just related).
From 1 January 2021, the thin capitalization rules are replaced, as per the Decree, with a general restriction …