Tax Valuation of Assets and Liabilities: Peru and Chile Are Moving Toward Market Value

Carlos Vargas Alencastre and Juan Alberto Pizarro Bahamondes

Valuation: A New Front in Auditing

The motivation is practical. Valuing an unlisted equity stake in a corporate reorganization, an intercompany brand transfer, or a customer portfolio acquired in an asset sale regularly leads to tax audits and litigation. In Chile, an analysis of 539 tax assessment rulings between 2012 and 2026 by attorney Cristóbal Díaz Guitart shows that the Internal Revenue Service (Servicio de Impuestos Internos or SII in Spanish) had its tax assessments upheld in full in 47.5% of cases, while taxpayers had their claims fully sustained in 32.3% and partially sustained in 19.9%. Few subject areas feature such persistent litigation.

Recent reforms in both countries address this issue: if market value is to be the standard, taxpayers and tax authorities need a common technical language to determine and discuss it.

Peru: International Valuation Standards Are Incorporated into Regulations

Peru took this step in two phases. Legislative Decree No. 1663, published on September 24, 2024, and effective as of January 1, 2025, amended paragraph 7) of subsection e) of Article 32-A of the Income Tax Law. “Other methods” of Transfer Pricing are no longer a residual, open-ended category: the law now specifically lists discounted cash flow, multiples, equity value, and valuation for unlisted shares or participations, and adds the multi-period excess earnings method for other transactions, typically involving intangibles. It also excludes the discounted cash flow method when the transferor holds less than 5% of the capital or the issuing company’s net income does not exceed 1,700 UIT, and requires a technical report substantiating the market value.

Supreme Decree No. 302-2025-EF, published in El Peruano (Peruvian official gazette) on December 17, 2025, completed the framework with the new Article 113-B of the Regulations. Three rules define it:

1. Reference to international standards: Other methods are applied in accordance with internationally accepted best practices in effect as of January 1, 2025, “such as the International Valuation Standards” of the International Valuation Standards Council (IVSC), provided they do not conflict with the law.

2. Minimum content of the technical report: The report must contain, at a minimum, the same information required for a valuation report under the IVS in effect as of January 31, 2025—that is, the edition that took effect on that date.

3. Documentation Requirements: The taxpayer must demonstrate why the traditional methods listed in paragraphs 1) through 6) are not appropriate, why the chosen method is the most suitable, and the content of the report. National Superintendency of Customs and Tax Administration (SUNAT) may request this documentation during an audit or inspection.

The decree also limits Articles 111, 114, and 115 of the Regulations (comparability adjustments, price range, and interquartile method) to methods 1) through 6). The message is clear: the valuation of a company or an intangible asset is not subject to the logic of comparables and price ranges, but rather to the discipline inherent in professional valuation.

Chile: The Arm’s-Length Value in Article 64 and the Guidelines Under Review

In Chile, Law No. 21,713 on Tax Compliance amended the Article 64 of the Tax Code. It modernized the SII’s authority to assess values and expressly incorporated the market value or arm’s-length value as a parameter for evaluating certain transactions. The Service may make a well-founded assessment when the value assigned by the parties differs significantly from market value.

Circular No. 23 of 2025 provided guidance on the new rule and established an important starting point: submitting a valuation report is optional, and the taxpayer may substantiate the value of their transactions using all means of evidence permitted by law.

The next step is currently underway. The SII convened technical working groups with valuation entities and specialists, including the Association of Accountants of Chile, to draft a resolution with methodological guidelines. The text does not invent new methods; rather, it incorporates approaches derived from the International Valuation Standards and the OECD Guidelines, such as discounted cash flows, comparable multiples, replacement cost, or royalty savings. What it does do is clarify what a well-founded valuation means in practice: justifying the chosen approach and method, substantiating the reasonableness of the figures, and explaining the source of the data and comparables.

These requirements work both ways. They guide the work of the tax auditor—who must substantiate their valuation—and provide taxpayers with a clear standard for documenting their transactions. The alternative to having established criteria is not greater freedom for the taxpayer, but rather greater case-by-case discretion. Chile has already gone down this path with transfer pricing: the local instructions regarding Article 41 E of the Income Tax Law implemented the OECD Guidelines without superseding them.

Two Models, One Direction

The two countries agree on the substance, but differ on the method and on who carries the technical burden.

Peru chose the most direct approach: it incorporated the IVS by reference and established their content as the minimum requirement for the report. This provides clarity on what is expected but shifts the cost of compliance to the taxpayer. It also raises a question: the regulation uses two cut-off dates—January 1, 2025, for best practices, and January 31, 2025, for the report’s content—and establishes a static version of a standard that the IVSC updates periodically.

On the other hand, Chile is seeking a methodological framework that would primarily impose obligations on the tax authority while allowing taxpayers to invoke it voluntarily. It preserves the freedom to present evidence, but has not yet defined what a report must contain to be considered technically sufficient. On this point, the Peruvian experience offers a useful reference: minimum content based on the IVS, without making the report mandatory.

Neither country follows the model of a presumed value. Spain, with its Cadastral Reference Value, shifted the burden of disproving it to the taxpayer, and its Constitutional Court only validated it in 2026 on the condition that it can be challenged with any form of evidence. Peru and Chile are committed to the method, not the figure.

What this Means for Multinational Groups Operating in the Region

For a group with a presence in both countries, the practical implication is clear: the exact same valuation may be reviewed in Lima and Santiago under frameworks that speak the same technical language. Three key recommendations emerge from this:

• Apply IVS standards from the outset: An appraisal report that meets the minimum disclosure requirements in Peru will also serve as the strongest defense against an SII tax valuation (“tasación” in Spanish).

• Document the rationale for the selected methodology, not just the output: Both tax authorities—through different mechanisms—focus heavily on why a specific valuation approach was chosen and the underlying source data.

Tax valuation is shifting from a realm of uncertainty to a space for technical discussion. Peru has already established its own regulations. Chile now has the opportunity to develop its own by learning from that experience.

Carlos Vargas Alencastre, CEO of TPC Group, and Juan Alberto Pizarro Bahamondes, Partner of TPC Group and Chair of the Tax Commission of the Association of Accountants of Chile.

Sources

·       Supreme Decree No. 302-2025-EF, El Peruano, December 17, 2025

·       Legislative Decree No. 1663 (LP Derecho)

·       SII: Circular No. 23 of 2025