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Tax Deductions Related to an Environmental Accident According to the Peruvian Legislation

Received: 11 February 2022     Accepted: 1 March 2022     Published: 9 March 2022
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Abstract

In January of 2022 the coast of Peru was affected by the leak of over eleven thousand barrels of oil into the sea. The company responsible for the leak (Repsol) has taken measures in order to compensate the environmental damage caused but there are also fines to be applied against such entity. The aforementioned measures include the cleaning of the ocean as well as the donation of provisions to the population that has been directly affected by the environmental accident, among others. Considering the expenses that come as a direct consequence of an environmental accident it is important to analyze the tax treatment that applies to them. This analysis develops from the premise that according to the Peruvian Tax Law (PTL) an expense that complies with the causality principle (CP) can be deducted in order to determine the net taxable income. The CP implies that an expense can be deducted as long as it takes place with the objective of maintaining the source of taxable income or to create the source of such taxable income. For the current analysis, the legislation, doctrine and the jurisprudence have been considered. This has allowed us to conclude that even though the Peruvian legislation considers the CP as parameter to determine whether or not an expense can be deducted, there are some expenses related to an environmental accident which cannot be deducted to determine the net taxable income.

Published in International Journal of Law and Society (Volume 5, Issue 1)
DOI 10.11648/j.ijls.20220501.26
Page(s) 143-148
Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

Copyright

Copyright © The Author(s), 2022. Published by Science Publishing Group

Keywords

Causality Principle, Fines, Donations, Expenses

References
[1] Tax Court sentence 04867-5-2020.
[2] Tax Court sentence 16591-3-2010.
[3] Tax Court sentence 07339-8-2018.
[4] Picón. J. (2021). Who took my expense? The Law, the SUNAT or did I lost it…Dogma Ediciones. (Lima, Perú). 25.
[5] Tax Court sentence 03981-1-2004.
[6] Tax Court sentence 11021-4-2019.
[7] Peruvian Income Tax Law, approved by Supreme Decree 179-2004-EF.
[8] Medrano. H. (2018). Tax Law Income Tax: Significant Aspects. Essential Collection of Law 32. Pontificia Universidad Católica del Perú. (Lima Perú) 103.
[9] Tax Court sentence 07944-4-2016.
[10] Tax Court sentence 03720-3-2017.
[11] Tax Court sentence 03544-3-2014.
[12] Tax Court sentence 04754-3-2014.
[13] Tax Court sentence 01707-3-2019.
[14] Tax Court sentence 11000-1-2017.
[15] Tax Court sentence 00431-3-2018.
[16] Constitutional Court sentence issued on the file 0048-2004-PI/TC.
[17] Legislative Project 1208/2021-CR.
Cite This Article
  • APA Style

    Gonzalo Alonso Escalante Alpaca. (2022). Tax Deductions Related to an Environmental Accident According to the Peruvian Legislation. International Journal of Law and Society, 5(1), 143-148. https://doi.org/10.11648/j.ijls.20220501.26

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    ACS Style

    Gonzalo Alonso Escalante Alpaca. Tax Deductions Related to an Environmental Accident According to the Peruvian Legislation. Int. J. Law Soc. 2022, 5(1), 143-148. doi: 10.11648/j.ijls.20220501.26

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    AMA Style

    Gonzalo Alonso Escalante Alpaca. Tax Deductions Related to an Environmental Accident According to the Peruvian Legislation. Int J Law Soc. 2022;5(1):143-148. doi: 10.11648/j.ijls.20220501.26

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  • @article{10.11648/j.ijls.20220501.26,
      author = {Gonzalo Alonso Escalante Alpaca},
      title = {Tax Deductions Related to an Environmental Accident According to the Peruvian Legislation},
      journal = {International Journal of Law and Society},
      volume = {5},
      number = {1},
      pages = {143-148},
      doi = {10.11648/j.ijls.20220501.26},
      url = {https://doi.org/10.11648/j.ijls.20220501.26},
      eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijls.20220501.26},
      abstract = {In January of 2022 the coast of Peru was affected by the leak of over eleven thousand barrels of oil into the sea. The company responsible for the leak (Repsol) has taken measures in order to compensate the environmental damage caused but there are also fines to be applied against such entity. The aforementioned measures include the cleaning of the ocean as well as the donation of provisions to the population that has been directly affected by the environmental accident, among others. Considering the expenses that come as a direct consequence of an environmental accident it is important to analyze the tax treatment that applies to them. This analysis develops from the premise that according to the Peruvian Tax Law (PTL) an expense that complies with the causality principle (CP) can be deducted in order to determine the net taxable income. The CP implies that an expense can be deducted as long as it takes place with the objective of maintaining the source of taxable income or to create the source of such taxable income. For the current analysis, the legislation, doctrine and the jurisprudence have been considered. This has allowed us to conclude that even though the Peruvian legislation considers the CP as parameter to determine whether or not an expense can be deducted, there are some expenses related to an environmental accident which cannot be deducted to determine the net taxable income.},
     year = {2022}
    }
    

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    JO  - International Journal of Law and Society
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    AB  - In January of 2022 the coast of Peru was affected by the leak of over eleven thousand barrels of oil into the sea. The company responsible for the leak (Repsol) has taken measures in order to compensate the environmental damage caused but there are also fines to be applied against such entity. The aforementioned measures include the cleaning of the ocean as well as the donation of provisions to the population that has been directly affected by the environmental accident, among others. Considering the expenses that come as a direct consequence of an environmental accident it is important to analyze the tax treatment that applies to them. This analysis develops from the premise that according to the Peruvian Tax Law (PTL) an expense that complies with the causality principle (CP) can be deducted in order to determine the net taxable income. The CP implies that an expense can be deducted as long as it takes place with the objective of maintaining the source of taxable income or to create the source of such taxable income. For the current analysis, the legislation, doctrine and the jurisprudence have been considered. This has allowed us to conclude that even though the Peruvian legislation considers the CP as parameter to determine whether or not an expense can be deducted, there are some expenses related to an environmental accident which cannot be deducted to determine the net taxable income.
    VL  - 5
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Author Information
  • Law and Political Science Department, Saint Paul Catholic University, Arequipa, Peru

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