Tax expert Luis Durán Rojo warns about the irregularity of the ISC.
Peru.- Luis Durán Rojo, one of the country's most prominent tax experts and a professor of Tax Law at the Pontifical Catholic University of Peru, pointed out that the application of the Selective Consumption Tax (ISC) to online betting in Peru is inapplicable due to the absence of the fundamental elements that make up the hypothesis of the tax.
Durán Rojo explained to the local media La República that, according to article 1 of Law 31557, this regulation aims to regulate the exploitation of online gambling, an activity that was not previously regulated. Since there was no regulation before the law, legally it could not be considered that these bets existed for tax purposes.
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The expert clarified that, in article 3 of this law, specific definitions of what is a "remote sports bet" and a "remote game" are introduced, terms that were not contemplated in previous Peruvian legislation. According to Durán Rojo, this implies that we are dealing with a new modality of bets and games, which makes the ISC inapplicable to these new models.
Durán Rojo emphasized that, since this activity did not exist in the previous legal framework, it was not possible for it to be subject to taxes. In his analysis, he commented that in the law of IGV and ISC, in article 50, which originally taxed gambling, there was no legal or real basis to include online betting. "Those who drafted the regulation thought they were including traditional gambling, but they were not," he sentenced, qualifying the regulation as a mistake.
The specialist explained that, from his tax perspective, remote games and remote sports betting were not included in law 31557 because the essential elements of the tax hypothesis, such as the "what" and the "where," were missing.
"Legislative Decree 1644 does not specify what is being taxed, but only where the regulation will be applied," he stated. For Durán Rojo, this lack of clarity turns the tax into something "dead," since, without the precise definition of what is being taxed, there is no legal basis to apply the tax. "A regulation also cannot define what is being taxed," he added.
Furthermore, the tax expert highlighted that the new law regulated activities that did not exist before, which poses a dilemma: how to include these new betting modalities within the previous definitions that only contemplated physical games? According to Durán Rojo, this type of extension through interpretation does not conform to the principle of legal reserve.
