Works for Taxes

  • Description

    The Works for Taxes mechanism promotes the participation of the private sector in the financing and execution of public investment projects (PIP) of municipal or regional units, public universities and even of the national government, without the respective entity having to mobilize public funds. Thus, through the signing of an agreement, the private company is obliged to finance and execute a specific PIP with a charge to the income tax to be paid the following fiscal year by the company, up to 50%. On the other hand, regional and local governments, public universities or the national government entity that owns the PIP are financed and begins to pay the following year after the work is completed, with a charge to the transfer of their resources from the canon, over-canon, royalties, customs revenues and participations, as well as the resources that are assigned to the funds that the Ministry of Economy and Finance (MEF) has created for this purpose.

    This mechanism allows the private sector to improve its relationship with the community, contribute to the success of its social responsibility programs, and in general, contribute to its community, directly applying its taxes to projects that benefit the population.

    As for the entities that own the PIPs, this mechanism makes it possible to accelerate the execution of quality projects, reduce the infrastructure gap, and up resources for the execution of other projects demanded by the population.

    The Works for Taxes mechanism may be used to promote the execution of PIPs in sectors such as health, water and sanitation, road infrastructure, irrigation infrastructure, security, public cleaning, education and tourism.

    Estudio Echecopar has actively participated in the formulation, processing and management of PIP under this mechanism since its inception, providing advice to various private companies interested in knowing and applying it to works in their areas of influence.

    We have a specialized and highly trained team to meet the needs of customers in the various stages of Works for Taxes, including during formulation, nomination, signing of the Investment Agreement and execution of the PIP.

    The main projects in which Estudio Echecopar has participated in are:
    Advice on the execution of the PIP called Puente Chilina in Arequipa. In this process, the Firm advised the consortium formed by Interbank S.A.A., Southern Perú Cooper Corporation, and Unión de Cervecerías Peruanas Backus and Johnston S.A. in the selection process under the Works for Taxes scheme convened by the regional government of Arequipa for the financing and construction of the Puente Chilina.Puente Chilina, 512 meters long, is the fourth component of a Vial Project that connects the districts of Miraflores, Alto Selva Alegre, Yanahuara, Cayma and Cerro Colorado in Arequipa. The approximate investment amount was PEN 109,699,729.80 million.
    Advice on the execution of an investment Agreement signed with the Ministry of the Interior for the modernization of seven police stations in the interior of the country. The approximate investment amount is PEN 25 million.
    Advice to various municipalities on the implementation and use of Tax Works.

    The services we provide include:

    • Advice on the identification of prioritized projects by regional or local governments, universities, or the national government to be executed through Works for Taxes.
    • Advice for the request for prioritization of PIPs to the state.
    • Advice and integral sponsorship to investors for the purpose of their participation in the selection processes convened under Works for Taxes.
    • Comprehensive legal advice to investors on corporate matters, specialized tax planning, project financing, labor issues, consortium contracts, and EPC or procurement contracts, among others.
    • Advice to the national government and regional or local governments and universities in structuring and conducting the processes of the projects under their responsibility.
    • Advice in the negotiation of addenda to investment agreements.
    • Advice to private companies on their relationship with public entities, supervision, MEF, among other entities related to the execution of the PIP, issuance and payment of certificates.
    • Representation in specialized arbitrations related to controversies arising from the execution of projects under Works for Taxes.
  • Publications
    Policies for the Recovery of Suspended Public Works are approved
    Spanish content
    New Directive on the Dispute Resolution Board regarding Public Procurement Agreements
    Spanish content
    New Directive on Economic Intervention in Public Works is approved
    Spanish content
    Guidelines to Hire Consulting Services for Project Management Office are approved
    Spanish content
  • News
    News
    October 15, 2019
    Government took steps towards BIM Implementation
    Spanish content
    News
    September 30, 2019
    Promoting Private Investment during Hard Times
    Spanish content
  • Acknowledgments
    • Chambers & Partners
      Practices201820192020
      Public LawBand 1Band 1Band 1

      Testimonials

      Band 1: Chambers & Partners  2020

      "It has been a pleasure working with them in this area. We felt supported throughout and their desire to obtain favourable results for our company was apparent."

    • The Legal 500
      Practices201720182019
      Public LawBand 1Band 1Band 1

      Testimonials

      Band 1: The Legal 500 — 2019

      "Experts in public affairs". Excels for its specialist team of administrative, regulatory and public works specialists, "experience and knowledge" in all spheres of public law, and its "good relations with the public authorities and private companies".

Key Contacts

Zita Aguilera
Partner
Lima
+51 (1) 618 8590
Juan Carlos Moron
Partner
Lima
+51 (1) 618 8534
Yoshie Concha
Associate
Lima
+51 (1) 618 8409
Angela Raygada
Senior Associate
Lima
+51 (1) 618 8549
Ana Sofia Reyna
Of Counsel
Lima
+51 (1) 618 8513