Such legal system was approved, through Decision 578, by the Ministers of Trade of the Andean Community countries, within the framework of the Andean Community Commission meeting held on the Andean Community headquarters, in Lima, on May 4, 2004.

Among the improvements introduced by Decision 578 to the current rule, the following could be mentioned: transfer price treatment; widening and clarification of the royalties concept, widening of the concept of interest accrued on other financial returns, clarification on the subject of dividends and participations.

In addition, it increases the possibilities to make consultations and exchange information between the Andean Community member countries, and includes a clause on interpretation and application, and a further clause on collaboration between the countries for tax collection purposes.

The new community rule, which is the result of lengthy discussion and work, applies to any person living in any of the Andean Community countries, with regard to income and property taxes, and its purpose is to avoid double taxation on the same income or property at community level.

Decisión 578 will be effective "with regard to the income tax and property tax imposed and the amounts paid, proved, or entered as expenses, from the first day of the fiscal year following its publication in the Cartagena Agreement Official Gazette” (it was published on May 5, 2004, in Gazette Nº 1063).