TARIFF CREDITS - PAYMENTS IN INSTALLMENTS

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Payment in installments is a form of Customs debits payment that is expressly authorized by law. In Art.17 of the General Customs Law - D.L.809-- it is established that the credit payments will be made in cash, before the clearance except in the cases permitted by Law. 

The first paragraph of Art.36 of the Tax Code - Ordered Text of the Tax Code D.S. Nº 135-99-EF-- access to an extension or credit by installments can be made for general tax debts as granted by the judiciary. 

Thus tariff credits are called general credits for payment in installments given that the law expressly governs its application. 

The following are the norms in force and their main characteristics: 

1. D.S. Nº 037-96-EF: Grants tariff credits for payment in installments to companies in the Productive Sector 

• Beneficiaries: Production companies can claim the benefit of payment of duties in installments for Capital Goods: specifically New Machinery for production companies and the accessories, parts and pieces of these machineries for 10% of the FOB value of the good. 

• Number of Quotas: 9 six-month installments

• Guarantees Accepted:

- Letter of Guarantee

- Bailbond Policy

- Bank Certificate in Foreign Currency

- Warrant

- First and preferential bond on capital goods

- Insurance policy

• Minimum sum per quota: US$500.00

• Applicable interest rate: Foreign Exchange Passive Interest Rate (TIPMEX).

• Validity: until 31.DEC.2001. (D.S. Nº 141-2000-EF of 15.DEC.2000).

• Benefit granted to companies that sign contracts with the Government under the stipulations of laws that govern the different production sectors.  

• A Supreme Resolution authorizes the companies that sign contracts with the Government.

• Duties can be paid in installments that apply to intermediate goods and new capital goods that are included in the list in Annex 1 of D.S. Nº 084-98-EF-Regulations of Leg.Dec.Nº 818, and on the lists of the Supreme Resolutions that authorize each company contract with the Government. 

• Number of Quotas: those established in each contract approved by Supreme Resolution. 

• Guarantees: Each contract can establish the form of guarantee required. 

• To date, there are 3 contracts signed between the Government and private companies, of which only two are claiming the benefit of customs credits for paying in installments. 

• Applicable Interest Rate: Foreign Exchange Passive Interest Rate (TIPMEX).

• Minimum sum per quota: US$ 500

COMPANIES WITH CONTRACTS SIGNED WITH THE GOVERNMENT UNDER LEG. DECREE Nº 818

3. LEG. Decree 842 - Authorizes the payment in installments on inputs and raw materials imported through CETICOS, the industrial and commercial transformation centers

• Inputs and raw materials used in the production process can be claimed under the benefit of paying tariff duties in installments. 

• Number of Quotas: 9 six-month quotas

• Only applicable to goods unloaded at the ports of Ilo, Matarani or Paita.

• Minimum amount per quota: $ 500

• Interest rate applicable: Foreign Exchange Passive Interest rate (TIPMEX).

• The Guarantees: those established in Supreme Decree Nº 037-96-EF

• Validity: Undetermined

4. DECREE LAW Nº 25844 - Law of Electricity Concessions

• Authorizes Concessionaires as well as companies that are dedicated exclusively to generating, transmitting and distruibuting electricity, to customs credits on tariffs. 

• The concessions authorizations must be duly inscribed in the Registry of Electrical Concessions and duly informed and identified to the Ministry of Energy and Mines.  

• There are definitive and temporary concessions. The temporary concessions are granted immediately through Ministerial Resolutions, while the definitive concessions are granted by a Supreme Resolution backed by the Ministry of Energy and Mines. 

• Number of quotas: 36 monthly quotas

• Minimum sum per quota: US$ 500

• The guarantees indicated in Annex 2, of INRA-PE.05 procedures.

• Validity: 31.DEC.2000.

• Beneficiaries: (Art.1º)

1. Companies that cultivate crops or breed animals.
2. Sugar estates and companies.
3. According to Leg. Decree 885 - Art.2º: exempted are poultry breeding, agribusiness industry, and the lumber industry. 

• Goods that benefit (Art.1º): New or USED equipment and machinery to be used directly in any activity, EXCEPT automotive vehicles for freight or passengers. 

• List of goods: to be approved by Ministerial Resolution.

- Term: 3 years as of the date the request is accepted. 

• Installments:

1. Seven ( 7) six-monthly quotas.
2. The first quota is paid at the termination of the 3-year term. This quota includes 1/7 of the tariff duties plus the interest generated by the term. 
3. All other taxes and duties that are not included in the installment plan must be paid on the date the request is accepted: the General Sales Tax (IGV), Municipal Promotion Tax (IPM) and paper reimbursement. 
4. The guarantee that covers the installment sum plus interest must be presented on the date the request is presented. 

• Guarantees Accepted (Art 4º):

- Letter of Credit 

- Bailbond policy

- Warrant: son goods different to those imported.

The guarantee can be GLOBAL to cover all operations for installments that are filed with the same Customs Intendency office. 

The Guarantee must cover the total debt in installments plus interest.

• Interest rate applicable: Debit Interest Rate on Foreign Exchange (TIPMEX).

• Validity: up to 31.DEC.2005.

1. A use different to that stated.
2. Transfer of the goods without Customs authorization.
3. Expiration of guarantee.
4. Failure to pay 2 consecutive or alternate quotas.
5. Falure to abide by the legal norms.

Start of valid term: As of 01.Sept.2000.

6. D.S. Nº 105-2000-EF (Published 20.AUG.2000): Authorizes payment in installments for vehicles destined for public transport service. 

• Duties applicable for payment in installments (Art 1º):

1. Tariff duties: Ad valorem and Surcharge.

2. General Sales Tax.

• Valid: until 31.DEC.2004.

• Goods subject to benefit (Art.1º): Vehicles for public transport service:

1. Urban and inter-city transport of passengers: Buses of up to five years old, dated from the year after manufacture, and with a weight equal to or above 8500 kilograms, providing they were originally designed for the mentioned service and were built originally with the steering system on the left. 

 

2. Inter-province and international transport of passengers and of tourism transport: New buses with a weight equal to or above 8500 kilograms, providing the vehicles were designed for such a service and the steering sytem is origianally built on the left.   

 

3. Transport of Freight: New trucks or flatbed trucks of categories B-4 and B-5, with the steering system originally built on the left. 

    - Term: 6 months as of the date of clearance of the imported goods. For the effects of Customs, the 6 months will be counted as of the date the payment in installments was applied for.  

• Payment in Installments:

1. Nine (9) six-monthly quotas

 

2. The first quota is to be paid at six months after the installment was approved. This quota includes 1/9 of the tariff duties and the General Sales Tax, plus the interest generated by the installment. 

 

3. At the date the request for installments is accepted, the remaining taxes that are not included in the benefit must be paid: the Municipal Promotion Tax (IPM) and Customs clearance service (paper reimbursement). 

4. To be eligibile for the installment benefit, the transport company must present the following to CUSTOMS (Art.3º):

1. A request in the form of a sworn statement indicating the imported and CIF Value of these.

2. Proof of transport concession, operation permit from the business registry (in the case of freight transport), valid at the date of issue of DS Nº 105-2000-EF, issued by the following institutions: 

• Provincial municipal government for the urban and inter-city public transport service of passengers. 

• General Office of Ground Traffic of the Ministry of Transport, Communications, Housing and Construction or by the pertinent Regional Offices of Ground Traffic for inter-provincial and international transport of passengers, tourism transport, and land transport service of freight. 

• Guarantee that covers the amount of the tax debt to be paid in installments and interest. The guarantee must cover the total of the debt. 

• Insurance policy with coverage for all risks to cover the imported vehicles. Póliza de seguro con cobertura, que cubra todo riesgo sobre vehículos materia de importación. This requirement is not applicable to those who provide satisfactory proof to Customs that they can substitute the guarantee in case of loss or damage. 

• The guarantees accepted are(Art 3º):

1. Letter of Guarantee
2. Bailbond policy
3. Bank certificate
4. Primary mortgage

The type of guarantee accepted can be amplified by Resolution issued by the Minstry of Economy and Finance. 

As the payments are met, the guarantee can be reduced providing it covers the installments still pending.  

• Interest Rate applicable: Debit Rate for Foreign Exchange (TIPMEX).

• Loss of right for payment in installments (Art.5):

1. If the vehicles are not used exclusively for public service land transport, urban and inter-city, international transport of passengers by highway, tourist transport, or freight transport.  
2. A different use from that declared is given to the imported goods.
3. Transfer of the goods without Customs authorization
4. Expiration of guarantee without renewal.
5. Not renewing validity of all-risk insurance policy when this is required. 
6. Failure to pay 2 consecutive or alternate quotas. 
7. Failure to comply with the legal or complimentary norms.

CUSTOMS (Art.6º) :

Customs is to dictate complimentary norms to improve the application of Supreme Decree DS 105-2000-EF.

Application for benefits of Tariff Duty Payments in Installments