Peru

This report analyses the implementation of the AEOI Standard in Peru with respect to the requirements of the AEOI Terms of Reference. It assesses the legal frameworks put in place to implement the AEOI Standard.

The methodology used for the peer reviews and that therefore underpins this report is outlined in Chapter 2.

Overall findings

AEOI legal framework

Peru’s legal framework implementing the AEOI Standard is in place but needs improvement in order to be fully consistent with the requirements of the AEOI Terms of Reference. While Peru’s international legal framework to exchange the information with all of Peru’s Interested Appropriate Partners (CR2) is consistent with the requirements, its domestic legislative framework requiring Reporting Financial Institutions to conduct the due diligence and reporting procedures (CR1) has deficiencies significant to the proper functioning of elements of the AEOI Standard. More specifically, deficiencies have been identified in relation to the scope of Reporting Financial Institutions and Financial Accounts and there are deficiencies in the enforcement framework.

Overall determination on the legal framework: In Place But Needs Improvement

General context

Peru commenced exchanges under the AEOI Standard in 2020.

In order to provide for Reporting Financial Institutions to collect and report the information to be exchanged, Peru:

• relies on Article 87(7), Article 175(7 and 8) and Article 177(2, 3, 15, 27 and 28) of the Tax Code;

• relies on Articles 427 and 438 of the Criminal Code; and

• enacted Supreme Decree 256-2018-EF (Regulation establishing the financial information that shall be provided to SUNAT to conduct the automatic Exchange of information as set forth in international agreements and the Decisions of the Andean Community Commission).

Under this framework Reporting Financial Institutions were required to commence the due diligence procedures in relation to New Accounts from 1 January 2019. With respect to Preexisting Accounts, Reporting Financial Institutions were required to complete the due diligence procedures on High-Value Individual Accounts by 31 December 2019 and on Preexisting Lower Value Individual Accounts and Entity Accounts by 31 December 2020.

With respect to the exchange of the information under the AEOI Standard, Peru is a Party to the Convention on Mutual Administrative Assistance in Tax Matters and activated the associated CRS Multilateral Competent Authority Agreement in time for exchanges in 2020.

Findings and conclusions on the legal frameworks

The detailed findings and conclusions on the AEOI legal frameworks for Peru are below, organised per Core Requirement (CR) and sub-requirement (SR), as extracted from the AEOI Terms of Reference (see Annex C).

CR1 Domestic legal framework: Jurisdictions should have a domestic legislative framework in place that requires all Reporting Financial Institutions to conduct the due diligence and reporting procedures in the CRS, and that provides for the effective implementation of the CRS as set out therein.

Determination: In Place But Needs Improvement

Peru’s domestic legislative framework is in place and contains most of the key aspects of the CRS and its Commentary requiring Reporting Financial Institutions to conduct the due diligence and reporting procedures, but it needs improvement in relation to the scope of Reporting Financial Institutions required to report information (SR 1.1), the scope of Financial Accounts required to be reported (SR 1.2) and the framework to enforce the requirements (SR 1.4). Most significantly, Peru’s legislative framework does not define Financial Institutions in accordance with the AEOI Standard nor does it contain rules to prevent practices intended to circumvent the reporting and due diligence procedures as required.

SR 1.1 Jurisdictions should define the scope of Reporting Financial Institutions consistently with the CRS.

Findings:

Peru has defined the scope of Reporting Financial Institutions in its domestic legislative framework in a manner that is largely consistent with the CRS and its Commentary. However, a deficiency has been identified. More specifically, Peru has defined Financial Institutions with reference to entities described in other financial law, which will include entities that are not Financial Institutions under the AEOI Standard. The scope of Reporting Financial Institutions is material to the proper functioning of the AEOI Standard.

Recommendations:

Peru should amend its domestic legislative framework to ensure that the meaning of “Custodial Institution”, “Investment Entity” and “Specified Insurance Company” are defined in line with the AEOI Standard.

SR 1.2 Jurisdictions should define the scope of Financial Accounts and Reportable Accounts consistently with the CRS and incorporate the due diligence procedures to identify them.

Findings:

Peru has defined the Financial Accounts that are required to be reported in its domestic legislative framework and incorporated the due diligence procedures that must be applied to identify them in a manner that is largely consistent with the CRS and its Commentary. However, deficiencies have been identified. More significantly, Peru’s legislative framework:

• does not limit the use of a mailing address when applying the residence address test only to the special circumstances as contemplated in the Commentary; and

• does not define annuity contracts in line with the AEOI Standard.

The scope of Financial Accounts and the due diligence procedures are material to the proper functioning of the AEOI Standard.

Recommendations:

Peru should amend its domestic legislative framework to ensure that a mailing address is only permitted to be used in the special circumstances permitted under the AEOI Standard.

Peru should amend its domestic legislative framework to ensure that the exclusion of retirement income contracts from the definition of annuity contract is in line with the AEOI Standard.

SR 1.3 Jurisdictions should incorporate the reporting requirements contained in Section I of the CRS into their domestic legislative framework.

Findings:

Peru has incorporated the reporting requirements in its domestic legislative framework in accordance with the CRS and its Commentary.

Recommendations:

No recommendations made.

SR 1.4 Jurisdictions should have a legislative framework in place that allows for the enforcement of the requirements of the CRS in practice.

Findings:

Peru has a legislative framework in place to enforce the requirements in a manner that is largely consistent with the CRS and its Commentary. However, deficiencies have been identified. More specifically, Peru’s legislative framework:

• does not include rules to prevent all relevant persons (including Reporting Financial Institutions, other persons and intermediaries) from adopting any practices intended to circumvent the reporting and due diligence procedures as required; and

• does not impose sanctions on Account Holders and Controlling Persons for the provision of a false self-certification.

These are the key elements of the required enforcement framework relates to and are therefore material to the proper functioning of the AEOI Standard.

Recommendations:

Peru should amend its domestic legislative framework to introduce rules to prevent Financial Institutions, persons and intermediaries from adopting practices intended to circumvent the due diligence and reporting procedures.

Peru should amend its domestic legislative framework to include sanctions on Account Holders and Controlling Persons for the provision of a false self-certification. 

CR2 International legal framework: Jurisdictions should have exchange relationships in effect with all Interested Appropriate Partners as committed to and that provide for the exchange of information in accordance with the Model CAA.

Determination: In Place

Peru’s international legal framework to exchange the information is in place, is consistent with the Model CAA and its Commentary and provides for exchange with all of Peru’s Interested Appropriate Partners (i.e. all jurisdictions that are interested in receiving information from Peru and that meet the required standard in relation to confidentiality and data safeguards) (SRs 2.1 – 2.3).

SR 2.1 Jurisdictions should have exchange agreements in effect with all Interested Appropriate Partners that permit the automatic exchange of CRS information.

Findings:

Peru has exchange agreements that permit the automatic exchange of CRS information in effect with all its Interested Appropriate Partners.

Recommendations:

No recommendations made.

SR 2.2 Such an exchange agreement should be put in place without undue delay, following the receipt of an expression of interest from an Interested Appropriate Partner.

Findings:

Peru put in place its exchange agreements without undue delay.

Recommendations:

No recommendations made.

SR 2.3 Jurisdictions should ensure that the exchange agreements in effect provide for the exchange of information in accordance with the requirements of the Model CAA.

Findings:

Peru’s exchange agreements provide for the exchange of information in accordance with the requirements of the Model CAA.

Recommendations:

No recommendations made.

Assessed jurisdiction’s comments on the assessment of its legal frameworks

No comments made.