To date, Peru has double taxation avoidance agreements (DTAA) with seven other countries. These agreements allow the elimination of double taxation on transactions carried out by persons resident in the Contracting States of the DTA. Thus, one of the Contracting States totally or partially waives its taxing power.
Due to several BIT benefits for the residents of the Contracting States, in Peru through Supreme Decree No. 090-2008-EF, the “obligation” to require a Certificate of Residence for the BIT application was established.
Residence Certificate Considerations
- What is the Residence Certificate? It is a document certifying the residence of an individual in a State.
- What is its function? This accreditation allows the application of the benefits contained in the Double Taxation Agreement.
- How is the Residence Certificate issued? The individual not domiciled in Peru who requires the DTA application must request the Residence Certificate in his/her country before the competent authority of that State. In Peru, the competent authority for its issuance is SUNAT (Superintendencia Nacional de Aduanas y Administración Tributaria – National Superintendence of Customs and Tax Administration).
- Who applies for the Residence Certificate? The tax withholding agent must request the Residence Certificate to apply the benefits provided in the DTA.
- What happens if the Residence Certificate is not submitted at the withholding time? The individual not domiciled in Peru who requires the DTA application may request before the SUNAT to refund the taxes withheld by submitting the Residence Certificate.
- What is the Residence Certificate deadline? Those issued by the DTA Contracting State will be effective for four months. On the other hand, the Residence Certificate issued by Peru will be in force indefinitely.
Residence Certificate Obligations
Although Supreme Decree No. 090-2008-EF establishes the obligation to have a Residence Certificate to apply for the DTA benefits, none of the DTAs subscribed by Peru establishes such requirements for its application.
This discordance was analyzed by the Supreme Court in Cassation Decision No. 8380-2021-LIMA, where it established as a binding precedent that, by application of the normative hierarchy principles, the DTA provisions prevail over those of the Peruvian regulations referring to the Residence Certificate. In this regard, the Residence Certificate would be an additional formality, and its issuance and delivery do not limit the application of the DTA provisions.
Conclusions
The Residence Certificate allows the Peruvian State to prove that the DTA application is effectively carried out with a person resident in the DTA Contracting State entered into. Although the regulation establishes that it is an obligation, the national jurisprudence has established that this document is an additional formality that does not condition the application of the BIT benefits. Therefore, the DTA application can be submitted independently when issued with the Residence Certificate.
Conversely, the SUNAT will verify through the Residence Certificate that the party requesting the DTA application is a Contracting State resident.
It should be noted that the indefinite validity of the Residence Certificate issued by Peru was recently incorporated by Superintendence Resolution No. 000141-2024/SUNAT. It is an advance to simplify the residence accreditation and to make it a formal requirement. Likewise, validating the Residence Certificates issued abroad indefinitely is still a pending issue.
The DTA application entered into by Peru requires the observance and detailed analysis of the established requirements. Therefore, the tax lawyers‘ advice is of vital importance.
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Sources: N.º 000141-2024/SUNAT / DECRETO SUPREMO Nº 090-2008-EF / RESOLUCION DE SUPERINTENDENCIA Nº 230-2008-SUNAT