The presumption of indirect share transfer via the issuance of undervalued shares: a critical review of the third scenario

Abstract

Peru’s indirect transfer of shares regime includes a presumption of indirect transfer applicable to the issuance and placement of shares or equity interests below their fair market value (Third Scenario). Although this presumption was conceived as a specific anti-avoidance rule aimed at taxing disguised sales, its current legal framework allows its effects to extend to transactions that do not involve an effective transfer of control or a genuine manifestation of taxable capacity. This article critically examines the scope of the Third Scenario by analyzing its legislative evolution, its economic rationale, and the interpretative limits applicable to legal presumptions in tax law.

In particular, the article examines the presumption in light of the principle of ability to pay and highlights the relevance of the transfer of control as a criterion for assessing the reasonableness of its application. It also analyzes the role of the 10% Test as a criterion for defining the material scope of the regime, emphasizing that its recognition under the First Scenario (through the concurrent application of the 50% Test and the 10% Test) reflects a standard of economic materiality shared by comparative legislation. By contrast, the absence of this threshold in the Third Scenario gives rise to concerns regarding the coherence and reasonableness of the presumption’s application.

Finally, the article concludes that, under the current legal framework, the 10% Test cannot be applied to the Third Scenario through interpretation and that its incorporation would require an express legislative amendment.