Exchange of information and transparency

19 June, 2024

In Peru, the qualification of a country as non-cooperating or low or no taxation is made according to criteria determined by internal laws, being the SUNAT responsible for the evaluation and its determination, which must communicate annually to the Ministry of Economy and Finance (MEF) the list of countries that qualify as such.  

Exclusion from qualification

Regarding the qualification, Article 86 specifies that those countries or territories that are members of the OECD or that have a Double Taxation Avoidance Agreement with Peru, which includes an information exchange clause and that fully comply with it, are excluded from qualifying as non-cooperating or low or no taxation countries. 

Criteria to be evaluated for qualification

According to numeral 1 of article 86 of the LIR Regulations, a country or territory will qualify as non-cooperating or low or null taxation when: 

  • With respect to Tax Information Exchange Agreements or Double Taxation Avoidance Agreements (DTA) with Peru, which agree to an exchange of information: 
    1. The country or territory does not have a CDI agreement.  
    2. The country or territory has an agreement or DTA, but does not comply with it.  
    3. The country or territory has an agreement or DTA, but complies with it in a limited manner due to its legal norms or administrative practices. 
  • The country or territory lacks transparency at the legal, regulatory or administrative operational level. 
  • The country or territory applies a corporate income tax rate of 0% or less than 60% of the rate that would apply in Peru. 

In this regard, the classification of a country or territory as non-cooperating or low or no taxation means that SUNAT must comply with its obligation to communicate to the MEF the list of countries or territories that have complied and failed to comply with the exchange of information or have complied in a limited manner.   

In this regard, Report No. 000026-2024-SUNAT/7T0000 develops the implications of SUNAT’s obligation. 

Report No. 000026-2024-SUNAT/7T0000

On May 30, 2024, SUNAT published the referred report, where it develops the application of the criteria described in point 1 by SUNAT. Among the main points reflected in the report are the following: 

  • According to article 102-A of the Tax Code, the exchange of information must be upon request, automatic and spontaneous.   

In this sense, mutual administrative assistance implies cooperation between countries, where both comply with the exchange of information. Both the Tax Code (TC) and the Convention on Mutual Administrative Assistance in Tax Matters (CAAMMF) have specified definitions of each modality of information exchange: 

  • Upon request. –   
    • SUNAT provides, to the requesting country, the information it has, considering the international conventions (article 102-C TC).  
    • In principle, a requesting State must request information related to specific persons or transactions; to which, the requested State must comply with providing what is requested (article 5 of the CAAMMF).  
  • Spontaneous. – 
    • SUNAT spontaneously exchanges information that the competent authority considers to be of interest (article 102-E CT).  
    • It implies that there is no prior request, so that a Party transmits to the other Party the information of which it has knowledge (article 7 of the CAAMMFTA).  
  • Automatic. –   
    • SUNAT communicates periodically and automatically to the competent authority, the information and data agreed upon in the international agreements entered into, which includes the automatic exchange of financial information (article 102-D CT).  
    • According to the procedure determined by mutual agreement, the parties will exchange information automatically (article 6 of the CAAMMF).
  • The lack of transparency at the legal, regulatory or administrative functioning level of a country or territory implies that the country or territory has reservations regarding:  
    • The tax system applicable in its jurisdiction.  
    • The information of the parties operating in its jurisdiction.  
    • The transactions carried out by the parties operating in its jurisdiction.  

According to the criteria described above and determined by domestic legislation, SUNAT proceeds annually to evaluate the compliance status of countries as non-cooperating or low or no taxation countries. This will have a direct impact on the operations that businessmen carry out with a country that qualifies as such, since they have specific regulations for the taxation of taxes, such as a special applicable rate, the non-allowability of expenses when they come from such countries, among others.   

For more information, do not hesitate to contact VAG Global, where we have professionals specialized in financial auditing, accounting and tax and legal advice that will allow your business to clarify all your doubts in this regard.  

Source: SUNAT