Do Tax Compliance Profiles affect Tax Confidentiality?
Do Tax Compliance Profiles affect Tax Confidentiality?
It is well known that the level of economic informality in our country is very high. Formal businesses are those whose owners have chosen to pay the taxes applicable to their activities and to be subject to the supervision of our tax authority (SUNAT) within the framework of our legislation. The comments below are those from a taxpayer.
The publication of tax compliance profiles by SUNAT affects one of the principles that led formal businesses to subject themselves to SUNAT’s supervision: Tax confidentiality. Tax confidentiality protects the information obtained by the Tax Authority, ensuring that sensitive taxpayer data is not disclosed without authorization. However, making compliance profiles publicly accessible may harm formal businesses by damaging their market reputation and may consequently affect their business results; i.e., highly sensitive business information will become public knowledge.
Said compliance rating, which is available on SUNAT’s portal, will allow third parties to know the tax behavior of taxpayers. This information does not reveal specific details and establishes an unexplained rating that is made public. If one of the objectives of tax confidentiality is to maintain the confidentiality of the information held by SUNAT, using this information to assign publicly accessible ratings is, in my opinion as a taxpayer, a violation of tax confidentiality.
Article 85 of the Peruvian Tax Code sets out that tax information is confidential and can only be disclosed in specific cases, such as when it is requested by the Judiciary or the Attorney General. The publication of tax compliance profiles is not included in these exceptions. It will be up to the legal advisors of those businesses that feel affected to take the legal actions they deem appropriate.
Finally, a topic for reflection. I imagine that many small companies doing business in the midst of significant political and economic instability must be striving every month to pay their taxes and comply with our labor laws. In this context, I suppose they may frequently experience delays in their tax payments and may need to file amended tax returns to comply with our tax regulations. These businesses might possibly receive a D or E rating, which will be published on SUNAT’s portal.
What will such rating mean for the development of their businesses?
The publication of tax compliance profiles by SUNAT affects one of the principles that led formal businesses to subject themselves to SUNAT’s supervision: Tax confidentiality. Tax confidentiality protects the information obtained by the Tax Authority, ensuring that sensitive taxpayer data is not disclosed without authorization. However, making compliance profiles publicly accessible may harm formal businesses by damaging their market reputation and may consequently affect their business results; i.e., highly sensitive business information will become public knowledge.
Said compliance rating, which is available on SUNAT’s portal, will allow third parties to know the tax behavior of taxpayers. This information does not reveal specific details and establishes an unexplained rating that is made public. If one of the objectives of tax confidentiality is to maintain the confidentiality of the information held by SUNAT, using this information to assign publicly accessible ratings is, in my opinion as a taxpayer, a violation of tax confidentiality.
Article 85 of the Peruvian Tax Code sets out that tax information is confidential and can only be disclosed in specific cases, such as when it is requested by the Judiciary or the Attorney General. The publication of tax compliance profiles is not included in these exceptions. It will be up to the legal advisors of those businesses that feel affected to take the legal actions they deem appropriate.
Finally, a topic for reflection. I imagine that many small companies doing business in the midst of significant political and economic instability must be striving every month to pay their taxes and comply with our labor laws. In this context, I suppose they may frequently experience delays in their tax payments and may need to file amended tax returns to comply with our tax regulations. These businesses might possibly receive a D or E rating, which will be published on SUNAT’s portal.
What will such rating mean for the development of their businesses?
Contact Us
- Walter Suni, BSO Partner - Email: wsuni@bdo.com.pe
- Marcela Priori, BSO Partner - Email: mpriori@bdo.com.pe
- BSO Commercial - Email: atencioncomercial@bdo.com.pe