On 4 May 2023, Law No. 31735 amended several articles of Law No. 29230, "Law that promotes regional and local public investment with the participation of the private sector" ("OxI Law"). Among others, the following modifications were approved:
- The Certificates of "Regional and Local Public Investment-Public Treasury" (CIPRL) can now be used for the payment of any tax, debt or tax obligation that is income of the Public Treasury and administered by SUNAT. In addition, they may now be "redeemed" on account of Income Tax (IR) up to 80%. Before the amendment, the limit was 50% (Article 7)
- It is expressly incorporated that the purpose of the OxI Law is to promote, in addition to the execution of public investment projects: (i) investments in optimization, marginal expansion, replacement and rehabilitation (IOARR); (ii) the IOARR of State of National Emergency; and (iii) the maintenance of infrastructure (Article 1).
- The Law extend the limit of variations to investment agreements, from 30% to 50% of the total investment amount. The 50% limit may be exceeded in exceptional circumstances, provided that the modifications or variations: (a) have the purpose of protecting health, safety or human life; and (b) are caused by supervening events and are not attributable to the parties (Thirteenth Final Complementary Provision).
- The Law eliminates the restriction imposed on private companies executing projects to negotiate their CIPRL. In general, companies may finance, execute and/or propose OxI projects or investments. Previously, only companies that financed and proposed OxI projects or investments could negotiate their respective CIPRLs. With the modification, those companies in charge of execution can also negotiate (Article 6).
- El The Direct Deal for dispute resolution lasts a maximum of 30 working days. Once this period expires, any of the parties will be entitled to submit the dispute to conciliation or arbitration. The application of penalties is the only matter exempted from being submitted to direct negotiation (Article 16)
The Registry of Private Supervising Entities and Supervisors for Works for Taxes is created. Legal entities or individuals hired for the supervision of investment projects or IOARR must be registered in said registry. Such registry is implemented and administered by PROINVERSION, and the requirements for the registration procedure will be established in the Regulations. The registry must be officially implemented within a maximum period of 60 business days from the publication of the requirements (Article 18)
We hope that this information will be of relevance to you and your company. If you require any further information, please do not hesitate to contact us.
