Global forum on transparency and exchange of information for tax purposes peer reviews peru 2016 phase 1 legal and regulator

Executive summary1 This report summarises the legal and regulatory framework for transparency and exchange of information in Peru The international stand-ard, which is set out in the Glo

Peer Review Report Phase 1

Legal and Regulatory Framework

PEER REVIEWS, PHASE 1: PERU

The Global Forum on Transparency and Exchange of Information for Tax Purposes is

the multilateral framework within which work in the area of tax transparency and exchange

of information is carried out by over 130 jurisdictions which participate in the work

of the Global Forum on an equal footing.

The Global Forum is charged with in-depth monitoring and peer review of the implementation

of the standards of transparency and exchange of information for tax purposes

These standards are primarily refl ected in the 2002 OECD Model Agreement on Exchange

of Information on Tax Matters and its commentary, and in Article 26 of the OECD Model Tax

Convention on Income and on Capital and its commentary as updated in 2004, which has

been incorporated in the UN Model Tax Convention.

The standards provide for international exchange on request of foreseeably relevant

information for the administration or enforcement of the domestic tax laws of a requesting

party “Fishing expeditions” are not authorised, but all foreseeably relevant information

must be provided, including bank information and information held by fi duciaries, regardless

of the existence of a domestic tax interest or the application of a dual criminality standard.

All members of the Global Forum, as well as jurisdictions identifi ed by the Global Forum

as relevant to its work, are being reviewed This process is undertaken in two phases

Phase 1 reviews assess the quality of a jurisdiction’s legal and regulatory framework

for the exchange of information, while Phase 2 reviews look at the practical implementation

of that framework Some Global Forum members are undergoing combined – Phase 1

plus Phase 2 – reviews The ultimate goal is to help jurisdictions to effectively implement

the international standards of transparency and exchange of information for tax purposes.

All review reports are published once approved by the Global Forum and they thus represent

agreed Global Forum reports.

For more information on the work of the Global Forum on Transparency and Exchange of

Information for Tax Purposes, and for copies of the published review reports, please visit

www.oecd.org/tax/transparency and www.eoi-tax.org.

Consult this publication on line at http://dx.doi.org/10.1787/9789264265752-en.

This work is published on the OECD iLibrary, which gathers all OECD books, periodicals and

as at August 2016)

those of the Global Forum on Transparency and Exchange of Information for Tax Purposes.

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Please cite this publication as:

OECD (2016), Global Forum on Transparency and Exchange of Information for Tax Purposes Peer

Reviews: Peru 2016: Phase 1: Legal and Regulatory Framework, OECD Publishing.

http://dx.doi.org/10.1787/9789264265752-en

Table of Contents

About the Global Forum                                              5 Abbreviations                                                       7 Executive summary                                                  9 Introduction                                                       13

Information and methodology used for the peer review of Peru              13Overview of Peru                                                  14Recent developments                                               19

Compliance with the Standards                                       21

A Availability of information                                        21

Overview                                                        21A1 Ownership and identity information                               22A2 Accounting records                                            45A3 Banking information                                           51

B Access to information                                             53

Overview                                                        53B1 Competent Authority’s ability to obtain and provide information         54B2 Notification requirements and rights and safeguards                  65

C Exchanging information                                          67

Overview                                                        67C1 Exchange-of-information mechanisms                              68C2 Exchange-of-information mechanisms with all relevant partners         76C3 Confidentiality                                                77

C4 Rights and safeguards of taxpayers and third parties                  80C5 Timeliness of responses to requests for information                   82

Summary of determinations and factors underlying recommendations      85 Annex 1: Jurisdiction’s response to the review report                     87 Annex 2: List of all exchange-of-information mechanisms in effect         88 Annex 3: List of all laws, regulations and other material received          89

About the Global Forum

The Global Forum on Transparency and Exchange of Information for Tax Purposes is the multilateral framework within which work in the area

of tax transparency and exchange of information is carried out by over

130 jurisdictions, which participate in the Global Forum on an equal footingThe Global Forum is charged with in-depth monitoring and peer review of the implementation of the international standards of transpar-ency and exchange of information for tax purposes These standards are primarily reflected in the 2002 OECD Model Agreement on Exchange of Information on Tax Matters and its commentary, and in Article 26 of the OECD Model Tax Convention on Income and on Capital and its commen-tary as updated in 2004 The standards have also been incorporated into the UN Model Tax Convention

The standards provide for international exchange on request of seeably relevant information for the administration or enforcement of the domestic tax laws of a requesting party Fishing expeditions are not authorised but all foreseeably relevant information must be provided, including bank information and information held by fiduciaries, regardless of the existence

fore-of a domestic tax interest or the application fore-of a dual criminality standard

All members of the Global Forum, as well as jurisdictions identified by the Global Forum as relevant to its work, are being reviewed This process is undertaken in two phases Phase 1 reviews assess the quality of a jurisdic-tion’s legal and regulatory framework for the exchange of information, while Phase 2 reviews look at the practical implementation of that framework Some Global Forum members are undergoing combined – Phase 1 and Phase 2 – reviews The Global Forum has also put in place a process for supplementary reports to follow-up on recommendations, as well as for the ongoing monitor-ing of jurisdictions following the conclusion of a review The ultimate goal is

to help jurisdictions to effectively implement the international standards of transparency and exchange of information for tax purposes

All review reports are published once approved by the Global Forum and they thus represent agreed Global Forum reports

For more information on the work of the Global Forum on Transparency and Exchange of Information for Tax Purposes, and for copies of the pub-lished review reports, please refer to wwwoecdorg/tax/transparency and wwweoi-taxorg

AML Anti-Money laundering

BVL Bolsa de Valores de Lima

CDD Customer due diligence

CTF Counter Terrorism Financing

DTC Double Tax Conventions

EOI Exchange of information

FATF Financial Action Task Force

IBC International Business Company

OECD Organisation for Economic Co-operation and

Development

OSCE Organismo Supervisor de las Contrataciones del Estado

(SupervisoryAgency of the Government Procurement Office)

RUC Registro unico de contribuyentes (Single Register of

Taxpayers)

RNP Registro Nacional del Proveedores del Estado (National

Register of Government Providers)

SBS Superintendencia de Banca, Seguros y AFP

(Superintendence of Banking, Insurance and Private Pension Funds Administrators)

SMV Superintendencia de Mercado de Valores (Securities

Market Superintendence)

SUNARP Superintendencia Nacional de Registros Públicos

(Superintendence of Public Registries in Peru)

SUNAT Superintendencia Nacional de Aduanas y de

Administración Tributaria (National Superintendence of

Customs and Tax Administration)

TIEA Tax Information Exchange Agreement

UIF Unidad de Inteligencia Financiera (Financial Intelligence

Unit)

UIT Unidad Impositiva Tributaria (Tax Imposition Unit)

VAT Value Added Tax

Executive summary

1 This report summarises the legal and regulatory framework for transparency and exchange of information in Peru The international stand-ard, which is set out in the Global Forum’s Terms of Reference to Monitor and Review Progress Towards Transparency and Exchange of Information is concerned with the availability of relevant information within a jurisdiction, the competent authority’s ability to gain timely access to that information, and, in turn, whether that information can be effectively exchanged with its exchange of information (EOI) partners

2 Peru is a country of 312 million inhabitants covering 1 285 216 square kilometres in western South America Peru’s GDP amounted to approxi-mately USD 192 billion in 2015 Over the past decade, Peru has been one of the region’s fastest-growing economies, with an average growth rate of 59% Peru is rich in natural resources, its main exports including metals and miner-als, such as copper, gold, zinc and silver

3 Relevant legal entities in Peru include domestic companies (joint stock companies and capital limited liability companies), foreign companies (branches and permanent establishments), domestic partnerships (general and

limited liability partnerships), fideicomisos and foundations Obligations to

ensure the availability of ownership and identity information exist for all of the above named entities either under the Commercial Code, the Companies Law, tax law, or the regulatory acts of the financial and security market regu-lators As such, Element A1 was found to be in place

4 Accounting requirements in line with the standard applicable to all relevant entities are set out under Peruvian tax and commercial law Book and records must be kept for a minimum of five years under the Tax Code and up

to five years after the liquidation of a business under the Commercial Code The Tax Code further requires that entities maintain underlying documenta-tion in line with the standard Accordingly, Element A2 was found to be in place

5 Pursuant to the Law on the Financial System, banks and other cial institutions have to comply with detailed know-your-customer obligations

finan-and must keep all records pertaining to account holders, as well as related financial and transaction information, for at least ten years Element A3 was therefore found to be in place

6 The competent authority under Peru’s TIEAs is the Superintendent

of the National Superintendence of Customs and Tax Administration

(Superintendencia Nacional de Aduanas y de Administración Tributaria)

(SUNAT) In the case of its DTCs and the Andean Community Directive 1, the competent authority for EOI purposes is the Minister of the Economy and Finance, who delegates this role to his authorised representative, the Superintendent of the SUNAT

7 The SUNAT has significant information resources at its disposal, including ownership, identity, and accounting information Further, the SUNAT has broad access powers under the Tax Code to obtain all types

of ownership, accounting and banking information not already in its own databases In order to obtain “passive” banking transaction information (infor-mation related to the bank holder’s bank account (such as, savings accounts, checking accounts, deposits, bank certificates, etc), the SUNAT is required

to obtain a court order to access this information directly from the bank Generally, the whole process to obtain the court order and access the banking information takes between 10 and 15 days In regards to secrecy provisions,

it is noted that while attorney-client privilege out in Peru’s domestic tion is found to be in line with the standard, the extent of secrecy provisions

legisla-as they apply to other professions may impede the access to information A recommendation for Peru to clarify the extent of professional secrecy as it relates to other professions has been made As a result, element B1 was found

to be in place

8 The application of rights and safeguards in Peru does not restrict the scope of information that the SUNAT can obtain, and there are no notifica-tion procedures in Peru Therefore, Element B2 was found to be in place

9 Peru’s network of 11 EOI mechanisms is comprised of 3 TIEAs,

7 bilateral DTCs and one multilateral Directive All of these agreements are

in force and meet the internationally agreed standard containing sufficient

1 The Andean Community (Comunidad Andina) is a customs union operating as

a free trade area between its members with a common external tariff The union comprises the South American countries of the Plurinational State of Bolivia (Bolivia), Colombia, Ecuador, and Peru The union was called the Andean Pact until 1996 and came into existence with the signing of the Cartagena Agreement

in 1969 Andean Community Decision 578, from herein referred to as the Andean Community Directive, facilitates the exchange of information in tax matters between members of the Andean Community

provisions to enable Peru to exchange all relevant information with all of its treaty partners As a result, Element C1 was found to be in place

10 Peru’s network of exchange agreements covers 12 treaty partners Peru continues to expand its treaty network and is currently finalising all internal procedures to join the multilateral Convention on Mutual Administrative

Assistance in Tax Matters, as amended (here on referred to as Multilateral

Convention) which it hopes to sign in early 2017 Comments were sought from Global Forum members in the course of the preparation of this report and in no case has Peru refused to enter into an EOI agreement Consequently, element C2 was found to be in place

11 All EOI articles in Peru’s exchange agreements contain ity provisions that meet the international standard and its domestic legislation also contains appropriate confidentiality provisions and enforcement meas-ures Consequently, element C3 was found to be in place

confidential-12 Peru’s exchange agreements protect rights and safeguards in ance with the standard by ensuring that the parties are not obliged to provide information that would disclose any trade, business, industrial, commercial or professional secret or information the disclosure of which would be contrary

accord-to public policy Most of these rights and safeguards are also explicitly vided for under domestic law Element C4 was found to be in place

pro-13 Peru’s response to the recommendations in this report, as well as the application of the legal framework to the practices of its competent authority will be considered in the course of its exchange of information on request (EOIR) review under the second round of reviews which is scheduled for the second half of 2018

Information and methodology used for the peer review of Peru

14 The assessment of the legal and regulatory framework of Peru was based on the international standards for transparency and exchange of

information as described in the Global Forum’s Terms of Reference, and was prepared using the Global Forum’s Methodology for Peer Reviews and

Non-Member Reviews The assessment was based on the laws, regulations,

and exchange-of-information mechanisms in force or effect as of 17 August

2016, other materials supplied by Peru, and information supplied by partner jurisdictions

15 The Terms of Reference break down the standards of transparency and exchange of information into 10 essential elements and 31 enumerated aspects under three broad categories: (A) availability of information; (B) access to information; and (C) exchanging information This review assesses Peru’s legal and regulatory framework against these elements and each of the enumerated aspects In respect of each essential element, a determination

is made that either (i) the element is in place, (ii) the element is in place but

certain aspects of the legal implementation of the element need improvement,

or (iii) the element is not in place These determinations are accompanied by

recommendations on how certain aspects of the system could be strengthened (see Summary of determinations and factors underlying recommendations at the end of this report)

16 The assessment was conducted by a team which consisted of two assessors and representatives of the Global Forum Secretariat: Mr Guillermo Nieves, Tax Advisor, Uruguay; Ms Virginia Tarris, Tax Law Specialist, Office of Assistant Deputy Commissioner (International), Internal Revenue Service, United States; and Ms Mary O’Leary and Ms Kathleen Kao of the Global Forum Secretariat The assessment team examined the legal and regu-latory framework for transparency and exchange of information and relevant exchange-of-information mechanisms in Peru

Overview of Peru

17 Peru is an upper middle income country of 1 285 216 square metres located in western South America It is bordered on the west by the South Pacific Ocean, on the north by Ecuador and Colombia, on the south by Chile, and on the east by Bolivia and Brazil Peru has approximately 312 mil-lion inhabitants (2015 estimate), 98 million of which reside in Lima, the capital 2 The main official languages in Peru are Spanish (841%), Quechua (13%) and Aymara (17%) 3 Its currency is the sol (PEN), with USD 1 equal

kilo-to PEN 329 4

Governance and legal system

18 The Peruvian legal system is a civil law one The Peruvian Constitution of 1993 is Peru’s twelfth Constitution and replaced the earlier

1979 Constitution The Constitution is the supreme law of the country, lowed by ordinary laws International treaties (other than human rights treaties, which are on equal standing as the Constitution) have the same status

fol-as ordinary laws

19 Peru is a unitary, representative and decentralised republic In 2002,

a constitutional reform declared decentralisation to be a “permanent policy of the state” 5 Since then, a gradual transfer of responsibilities from the central

to regional governments has taken place and decentralisation has become one

of the bedrock principles upon which Peru’s system of governance is based The levels of government are national, regional and local Peru is divided into

25 regions, which are further divided into provinces Provinces are composed

of districts The province of Lima does not form part of any region

20 Peru’s government is organised according to the principle of ration of powers and is separated into three branches: the executive, the legislative and the judiciary The Executive Branch consists of the President and two Vice Presidents As the head of the executive branch, the President serves as both Head of State and Head of Government The administration and management of public services is entrusted to the Council of Ministers (the President’s cabinet), which consists of a prime minister and specific ministers responsible for different areas (such as education, defence, finance

sepa-2 According to the Peruvian National Institute of Statistics and Information (INEI) based on the 2007 census

3 https://wwwciagov/library/publications/the-world-factbook/geos/pehtml

4 According to https://wwwoandacom/currency/converter/ on 16 August 2016

5 Republic of Peru: Country Administration Profile (United Nations, March 2005) (at http://unpan1unorg/intradoc/groups/public/documents/un/unpan023201pdf)

etc) The President is elected every five years by popular vote and cannot be re-elected for consecutive terms

21 Regional and local governments are also popularly elected and have political and administrative autonomy Regional governments are composed

of Regional Presidents, Regional Vice Presidents, Regional Councils, and Regional Coordinating Councils The functions of the Regional President include proposing and enforcing the budget, appointing government offi-cials, issuing regional decrees and regional resolutions, executing regional plans and programme, and administering regional properties and rents The Regional Council debates and votes on bills proposed by the Regional President and council members It also oversees all regional officials and can remove the Regional President, its Vice President and any council member from office Regional Presidents and Regional Vice Presidents are elected for four-year terms and, pursuant to a recent amendment to the Constitution, cannot serve consecutive terms

22 Legislative power is vested in both the executive branch and Congress The Legislature is a unicameral congress with 130 seats Members are elected based on proportional representation to serve five-year terms In addition to passing laws, Congress ratifies treaties, authorises government

loans (empréstitos), and approves the government budget Congress

legis-lates by passing laws and legislative resolutions, while the President does so through legislative decrees when Congress has delegated such power to him/her The President may also issue regulations implementing any law passed

by Congress or urgent decrees concerning economic and financial matters Such decrees will have the force of law To pass Congress, a bill must have

a majority vote Once finalised and passed by Congress, bills are sent to the President for approval The President has 15 days to send any comments

or objections to Congress, in the absence of which the bill will be deemed approved and subsequently promulgated

23 The Peruvian judiciary is the branch of government that interprets and applies the laws of Peru Peru’s judicial system is structured hierar-chically with the Supreme Court as the court of highest judicial instance The Supreme Court consists of 20 judges and is divided into a Criminal Chamber, a Civil Chamber, a Constitutional and Social Law Chamber, and four corresponding transitional chambersestablished to assist with the case load of the other chambers Below the Supreme Court are 33 superior courts (appellate courts), which have jurisdiction over judicial districts, in line with the country’s regional division and are located in the districts’ capital cities Below the superior courts are 211 courts of first instance (trial courts), which have jurisdiction over the individual provinces The fourth and lowest level

of the judiciary is composed of 623 courts of peace, each with jurisdiction over a single district and hearing cases of low economic value or pertaining

to minor issues Peru also has a Constitutional Court, or Constitutional Tribunal, which is tasked with safeguarding constitutional principles and has the power to repeal all or portions of the unconstitutional laws and acts

24 Peru is also a member of the Andean Community (Comunidad

Andina), a customs union, or trade bloc, along with Bolivia, Colombia, and

Ecuador, with the aim of promoting greater economic integration among its members The union came into existence with the signing of the Cartagena Agreement in 1969 and was called the Andean Pact until 1996 The Andean Community may legislate on specific matters that are directly applicable in Peru without the approval of Congress

25 Further, according to Article 3 of the Tratado de Creación del

Tribunal de Justicia del Acuerdo de Cartagena (Treaty creating the Court of

Justice of the Cartagena Agreement), directives of the Andean Community, once published in the official gazette of the Cartagena Agreement, are directly applicable in Peru without being ratified by Congress Article 5 sets out that member countries of the Andean Community must refrain from adopting any measures contrary to the provisions of these directives or that would restrict their application Therefore, in the event of a conflict with an ordinary law, a directive of the Andean Community will take precedence in Peru

The Peruvian economy

26 In the last ten years, Peru has been recognised as one of Latin America’s fastest growing economies The Peruvian economy grew by an average of 59% from 2006-15 6 with a stable exchange rate and low infla-tion, which was due partly to high international prices for Peru’s metals and minerals exports, which account for almost 60% of the country’s total exports Growth slipped in 2014 and 2015, due to weaker world prices for these resources

27 In 2015, the GDP per capita was USD12 402, having risen steadily over the last ten years 7 The GDP composition by sector is 04% fishing, 18% electricity and water, 53% agriculture, 62% construction, 112% commerce, 124% mining, 135% industry and 49% services 8A wide range of important mineral resources are found in the mountainous and coastal areas, and Peru’s coastal waters provide excellent fishing grounds Peru is the world’s second largest producer of silver and third largest producer of copper Its main imports consist of crude oil, petroleum and wheat and its main exports are copper, gold, zinc, fish meal and silver

6 wwwworldbankorg/en/country/peru/overview

7 http://dataworldbankorg/indicator/NYGDPPCAPPPCD?locations=PE

8 wwwbcrpgobpe/estadisticas/cuadros-anuales-historicoshtml

28 Peru has a strong free trade policy in place and since 2006 Peru has signed trade deals with the Canada, Chile, People’s Republic of China (China), Costa Rica, the European Free Trade Association, the European Union, Japan, Mexico, Panama, Singapore, South Korea, Thailand, and United States, Bolivarian Republic of Venezuela (Venezuela); concluded negotiations with Guatemala, Honduras, and the Trans-Pacific Partnership; and begun trade talks with El Salvador, India, and Turkey Peru also has signed a trade pact with Chile, Colombia, and Mexico, called the Pacific Alliance, that seeks integration of services, capital, investment and movement

of people Since the United States-Peru Trade Promotion Agreement entered into force in February 2009, total trade between Peru and the United States has grown by 40%

29 Peru is a member of the Andean Community, the Inter-American Development Bank (IDB), the International Monetary Fund (IMF), the Latin American Integration Association (LAIA), the Organisation of American States (OAS), the United Nations (UN) and the World Trade Organization (WTO), amongst others Peru has been a member of the Global Forum on Transparency and Exchange of Information for Tax Purposes since 2014

Overview of the financial sector

30 The financial sector in Peru comprises commercial banks, ance companies, municipal savings and loans banks, municipal loans banks, development entities for small and micro businesses, savings and loans associations authorised to receive deposits from the public, and rural savings and loans banks, financial companies, and other financial institutions The banking sector is comprised of 58 banks and as of September 2016, the total assets in the banking sector amounted to approximately USD 431 589 billion31 The Peruvian Superintendencia de Banca, Seguros y AFP (SBS)

insur-(Superintendence of Banking, Insurance and Private Pension Funds Administrators) is the “watchdog” of the national financial system The SBS

is a constitutionally autonomous institution with legal personality under public law It is the regulatory body responsible for supervising companies operating in the Peruvian financial and insurance sectors Law No 26702,

Ley General del Sistema Financiero y del Sistema de Seguros y Organica

de la Superintendencia de Banca y Seguros (Law of the Financial System)

establishes the framework for the regulation and supervision of companies operating in the financial and insurance sectors Since July 2000, the SBS also has been responsible for supervising private pension funds, a role that was previously performed by a separate superintendent that was subsumed into the SBS pursuant to Law 27328,

32 The Peruvian securities exchange is the Bolsa de Valores de Lima

(BVL) with an annual turnover of approximately USD 3 516 million

Twenty-five brokerage companies currently participate in the exchange

The BVL is governed by the Legislative Decree No 861, Ley del Mercado

de Valores (Securities Market Law), which regulates all matters relating to

public offerings of securities, investment funds, and other participants in the stock market The body responsible for the supervision and enforcement of

the Securities Market Law is the Superintendencia del Mercado de Valores

(SMV) (Securities Market Superintendence)

Taxation

33 Peru taxes its residents (companies and individuals) on their wide income Non-resident companies and individuals are taxed only on Peruvian-sourced income The following legal entities are considered resident

world-in Peru for world-income tax purposes: (i) companies that are world-incorporated world-in Peru

and (ii) permanent establishments in Peru of individuals or companies not

domiciled in the country (article 7 Income Tax Law) Permanent ments and branches of foreign companies are taxed on their Peruvian-sourced income

establish-34 The Tax Code, which set out the general tax principles, the rules for

the administration of taxes, penalties, procedures and collections, governs all taxes in Peru The imposition of income tax is governed by the Income

Tax Law The national tax administration Superintendencia Nacional de

Aduanas y de Administración Tributaria (SUNAT) is an independent

govern-ment agency responsible for revenue collection on behalf of the Governgovern-ment

of Peru The fiscal year runs from 1 January through 31 December, without any exceptions The tax returns for the accrued income generated during the fiscal year must be filed during the first three months of the subsequent year35 Peru imposes a range of taxes which are collected at the national level by SUNAT, the main ones being income tax, a value added tax, and a financial transactions tax The SUNAT also collects contributions to Social

Health Insurance (Essalud, equivalent to social security) and the National

Pension Office (ONP)

36 Law 30296, published on 31 December 2014 gradually reduces the corporate income tax rate in stages from 30% in 2014 to 26% in 2019 Generally, a 30% withholding rate on income is levied on non-residents However, some business activities are subject to other tax withholding rates For example, dividends and other forms of profit distributions are subject

to withholding tax at a rate gradually increasing from 41% in 2014 to 93%

in 2019 Interest from Peruvian-sourced income paid to non-residents is subject to a 499% tax, but only if the debt meets certain conditions Where

the conditions are not met, the interest will be subject to the 30% ing rate Income from the sale of securities made through a Peruvian stock exchange is subject to a withholding tax of 5%, although from 2016-2018, income from sales of securities are tax exempt under certain conditions

withhold-37 In regards to capital gains tax, in the case of individuals, Peru only taxes the capital gains derived from the sale of real estate and securities at a rate of 5% The income tax is payable annually in the case of income from the sale of securities and immediately in the case of income from the sale of real state Income generated by the lease of movable goods and immovable goods (ie real estate) is subject to a 5% tax which is realised on an annual basis In regards to capital gains tax for companies, the income generated by the lease or transfer of movable goods and immovable goods is subject to a 28% tax which is payable on an annual basis These taxes are applicable only

to companies and individuals who are resident in Peru

39 On 24 July 2016, Peru published Resolution 177-2016/SUNAT and Resolution 178-2016/SUNAT Resolution 177-2016/SUNAT establishes an obligation to a trustee domiciled in Peru, to file an informative return regard-ing a trust created under a foreign law Resolution 178-2016/SUNAT requires that branches, permanent establishments or representative offices of non-domiciled legal persons or entities that register before SUNAT (in order to obtain their tax identification number (RUC No)) must provide information regarding partners and members of non-domiciled legal persons or entities In the case of changes to this information, both resolutions establish the obliga-tion to update this information with the SUNAT

Compliance with the Standards

A Availability of information

Overview

40 Effective exchange of information (EOI) requires the availability

of reliable information In particular, it requires information on the identity

of owners and other stakeholders as well as information on the transactions carried out by entities and other organisational structures Such information may be kept for tax, regulatory, commercial or other reasons If the informa-tion is not kept or maintained for a reasonable period of time, a jurisdiction’s competent authority may not be able to obtain and provide it when requested This section of the report assesses the adequacy of Peru’s legal and regulatory framework on the availability of information

41 In respect of ownership and identity information, Peruvian tion (namely, the Tax Code and the Companies Law) imposes comprehensive obligations on domestic companies and partnerships to ensure that informa-tion is available either in the hands of a public authority or with the entity itself (in its articles of incorporation or shareholder register) These obliga-tions are complemented by the Anti-Money laundering (AML) legislation and rules concerning regulated activities that apply to obliged entities and financial institutions These obligations are accompanied by penalties for non-compliance Pursuant to a resolution issued by the Peruvian tax author-ity in July 2016, foreign companies and partnerships are also now required

legisla-to provide ownership information upon registration with the SUNAT Since

1968, Peruvian law has prohibited the issuance of bearer shares and the cept of nominee ownership is not recognised

con-42 Peruvian law does not recognise trusts as defined under common

law; rather it allows for fideicomisos, or fiduciary arrangements akin to trusts As only financial entities can administer or manage a fideicomiso,

they will come under the provisions of the AML law whereby all financial entities are obliged to identify their clients and maintain updated informa-tion for a minimum period of ten years from the conclusion of a transaction

or relationship Trustees of fideicomisos are required to maintain updated identity information on fideicomitentes and fideicomisarios pursuant to AML

rules and regulations Likewise, Peruvian residents acting as trustees of eign law trusts or of foreign trusts investing in Peru, are required to submit

for-to the SUNAT information on the settlors and beneficiaries The concept of

a private foundation does not exist under the laws of Peru as all Peruvian foundations have public and non-profit status Nonetheless, legal provisions exist to identify all parties to a foundation

43 Foreign companies having a sufficient nexus to Peru and branches

of foreign companies established in Peru are considered resident for tax poses and therefore must register and file annual returns containing updated ownership information with the SUNAT Accordingly, element A1 was found

pur-to be in place

44 Under the Tax Code, all relevant entities must keep reliable ing records, including underlying documentation, for a minimum of five years Further, accounting requirements in the Commercial Code also require books and records to be kept for up to five years after liquidation of a busi-ness Element A2 was thus found to be in place

account-45 Pursuant to the Law on the Financial System, banks and other cial institutions have to comply with detailed know-your-customer obligations and must keep all records pertaining to account holders, as well as related financial and transaction information, for at least ten years Element A3 was therefore found to be in place

finan-A.1 Ownership and identity information

Jurisdictions should ensure that ownership and identity information for all relevant entities and arrangements is available to their competent authorities.

46 The relevant entities and arrangements in Peru are companies (ToR A.1.1), partnerships (ToR A.1.3), trusts (ToR A.1.4), and foundations

(ToR A.1.5) Bearer shares (ToR A.1.2) have been abolished since 1968 and

no bearer shares currently exist in Peru This section also examines ment measures in place to ensure compliance with laws on the maintenance

enforce-of ownership and identity information enforce-of relevant entities

Companies (ToR A.1.1)

47 In Peru, companies (or societies) are created pursuant to Ley General

de Sociedades No 26887 (Companies Law) The Companies Law provides

for two types of companies: Joint Stick Companies and Capital Limited Liability Companies

• Joint Stock Company: The company law provides for three different

types of joint stock company:

1 The Sociedad Anónima (SA) (general joint stock company)

is the most common type of company in Peru In a joint stock company, the company’s capital is divided into nominative shares represented by negotiable share certificates Shareholders can

be either entities or individuals and at least two shareholders are required for incorporation Shareholders are not personally liable for the company’s obligations As of June 2016, there were

591 287 SAs registered with the SUNARP of which, 481 132 are registered for tax with the SUNAT The difference for the number of entities registered with the SUNARP and the SUNAT

is attributable to two factors First, many entities that initially register with the SUNARP do not proceed to carry on any eco-nomic activity and therefore do not proceed to register with the SUNAT Second, authorities have confirmed that the SUNARP records keep historical information which corresponds to an older period than the record information managed by SUNAT and therefore contains more entities Nevertheless, this issue shall be followed up in the next EOIR review of Peru

2 A joint stock company may also take the form of a closed

corpora-tion (Sociedad Anónima Cerrada) (SAC) A closed corporacorpora-tion

cannot have more than 20 shareholders and its shares cannot be registered in the Public Registry of the Securities Market

3 A joint stock company may also take the form of a public joint

stock company (Sociedad Anónima Abierta (SAA) when it meets one or more of the following conditions: (i) it has made a

primary public offering either of shares or obligations ible into shares; (ii) it has more than 750 shareholders; (iii) more

convert-than 35% of its capital belongs to 175 or more shareholders; (iv) it

is constituted as such in the articles of incorporation; or (v) all

voting shareholders unanimously approve the adjustment to that scheme (art 249 Companies Law) The shares of a public com-pany are listed on the Lima Stock Exchange and thus must be registered in the Public Registry of the Securities Market

• Capital Limited Liability Company (Sociedad Comercial de

Responsabilidad Limitada or SRL): A limited liability company may

be established with a minimum of 2 and a maximum of 20 partners, who can be both individuals and legal entities All partners have limited liability Capital stock is divided amongst them and cannot

be issued as share capital, but rather is divided as participations Participations are not tradable on the Peruvian stock exchange To incorporate a company, partners’ contributions must be subscribed

in full and at least 25% of each participation must be paid in As with SAs, no minimum amount of capital is required for incorporation SRLs do not have a Board of Directors Rather, the company is man-aged by one or more managers The general partners’ meeting is the limited liability company’s highest governing body As of June 2016, there were 244 880 SRLs registered with the SUNARP of which

172 476 are registered with the SUNAT

Company ownership and identity information required to be provided

The Superintendence of Public Registries and Notaries

49 SAs in Peru must be constituted via a public deed as formalised by

a notary Documents filed before a notary public will be filed in the notary’s public register All companies must then register with SUNARP prior to commencing operations to have proper legal personality A company’s deed (or social pact) is thus a public deed, which must be filed with a notary prior

to being filed with the SUNARP The incorporating document must include the names and addresses of the founding partners, as well as their spouses (if applicable), and their identification documents Further the document must detail the mailing address of the corporation, the amount of capital and the shares into which such capital is divided, the manner in which capital is paid and subscribed, and rules for increasing and decreasing capital stock SRLs are constituted in the same manner as SAs except that capital is divided into participation rather than shares

50 Pursuant to the Companies Registry Regulations (approved by Resolution No 200-2001-SUNARP-SN), each company will receive its own

entry in the companies register, which will reflect its initial registration and any subsequent “registrable acts”, including, for instance, increases or reductions

of capital Updates of this nature are also required to be notarised According

to article 4 of Resolution No 200-2001-SUNARP-SN, registrable acts do not include transfers of shares or bonds As such, companies are not required to file such changes before a public notary or inform SUNARP of transfers of shares, although all transfers of shares must be logged in the company’s own shareholder register Transfers of participations in SRLs, on the other hand, are required to be registered with SUNARP as well as executed in a public deed (transfers must be reflected in the public deed of incorporation) (art 271 Companies Law and arts 96 and 97 Resolution No 200-2001-SUNARP-SN)51 Failure to comply with registration requirements will result in a company acquiring an irregular status Article 423 of the Companies Law sets out that a company shall acquire irregular status under the following circumstances: (i) the public deed of incorporation was not filed before a

notary public within 60 days of signing the social pact, (ii) the public deed

was not granted before a notary public within thirty days after the assembly

at which the signatories to the deed were appointed, (iii) the company was not

registered in the SUNARP within 30 days of the public deed being granted,

(iv) the company’s registration was rejected by SUNARP, (v) the company

has been transformed without observing the provisions of the Companies

Law, or (vi) corporate activity continues despite having incurred grounds for

dissolution under the Companies Law When a company acquires irregular status, the directors, managers and representatives have joint and several unlimited liability for the contracts and acts of the corporation

The Tax Administration

52 Pursuant to the Law of Single Register of Taxpayers (approved by Legislative Decree No 943 and Superintendence Resolution No 210-2004/SUNAT), all companies with a fiscal domicile in Peru must be registered in the Single Register of Taxpayers (RUC) To become registered in the RUC,

a company must submit its certificate of registration with the SUNARP and ownership and identity information to the SUNAT In addition, this information should include copies of the national identification of the legal representative and percentage of each shareholder’s participation in the company’s capital Additionally, companies must submit Form 2054, which

requires ownership information on shareholders (including, inter alia, full

name or company name, address and other contact information, date of birth, and type and number of identity document) and the percentage of their participation in capital After registration, all persons receive an 11 digit tax identification number (RUC No), which will be used to identify the company for all correspondence with the SUNAT

53 Failure to register in the RUC is an offense punishable by a fine of 1 tax unit (UIT) 9 or confiscation of goods or temporary custody of vehicles as appropriate (art 173(1) Tax Code) Changes in shareholders must be registered

in the RUC within the first ten days of the month following the change (art 23 Resolution No 210-2004/SUNAT) Non-compliance with this obligation is punishable by a fine of 50% of a UIT (art 173(5) Tax Code)

54 All companies registered with the SUNAT are required to file an annual tax return Amongst the information to be provided in the return is the updated shareholder information, identifying all shareholders at the time

of filing the return and the date at which they became a shareholder (art 79 Income Tax Law)

55 Pursuant to the First Transitional and Final Provision of the Income Tax Law, legal persons domiciled in the country are obliged to inform SUNAT of issuances, transfers, and cancellations of shares and participa-tions, including indirect transfers of shares or participations Article 6 of the Resolution of Superintendence Nº 169-2014/SUNAT requires companies to inform the SUNAT of any such issuances, transfers or cancellations of shares within a month of such action taking place In order to notify the SUNAT

of an issuance, transfer or cancellation of shares, a company must complete

Virtual Form 1605 with, inter alia, the type of transfer, date of transfer, the

details of the transferor and transferee, identification of ticipants (including full names, identification document, and identification number where appropriate), the number of shares transferred, the unit value

shareholders/par-of the shares, and the percentage shareholders/par-of such shares relative to the total shares

of the company Issuances or cancellations of shares must be notarised and included in the public deed The date of execution of the public deed as well

as the full name of the notary before whom it was filed and the deed’s istration number in the public registry must also be included in the Virtual Form 1605 to be filed with the SUNAT

reg-56 Failure to submit the required documentation on share activities within the deadline constitutes an offence under the Tax Code punishable by

a monetary fine of up to 30% of the UIT (art 176(2) Tax Code) which in 2015 would amount to approximately PEN 1 283 (USD 387)

57 The SUNAT is required by law to retain all information submitted

to it for a period of 30 years The SUNAT then makes a determination of whether information is permanent or temporary Information deemed to have

“permanent” value is transferred to the General Archive of the Nation, while information determined to be of “temporary” value is destroyed upon the expiration of the 30 year period (precisely, at 29 years and 11 months)

9 In 2016 one taxpayer unit (UIT) was equal to PEN 3 950 (approximately USD 1 179)

Superintendence of Banks, Insurers and Private Pension Fund

Administrators

58 The requirements of the Peruvian Penal Law against

Money-Laundering (Ley Penal contra el Lavado de Activos) (AML Law) adds yet

another layer of requirements to maintain ownership information on the clients of entities performing regulated activities The SBS is the primary anti-money laundering supervisory body in Peru By Law 29038 (July, 2007), the Financial Intelligence Unit of Peru (UIF-Peru) was incorporated to the SBS with the task of receiving, analysing, processing, and transmitting rel-evant information in order to detect money-laundering

59 The scope of the AML regime extends to all financial entities ing out business in the financial sector as well as to designated non-financial businesses or professions (DNFBPs) In Peru, DNFBPs subject to the AML

carry-regime include, inter alia, public notaries, persons involved in the buying

and selling of currencies, antiquities dealers, sellers of jewellery and precious stones and metals, dispatchers of import/export businesses, and companies or individuals who receive donations or contributions from third parties (art 10 Law 526 of 1999) Lawyers and accountants are not obligated persons under Peru’s AML framework, although Peru notes its intention to develop legisla-tion categorising them as DNFBPs

60 Pursuant to articles 16 and 17 of the Law of the Financial System, the following activities and entities require prior authorisation from the SBS for their operation and are subject to the oversight of the SBS:

• Financial institutions (such as bank companies, financial companies, municipal savings and loans banks, municipal loans banks, devel-opment entities for small and micro businesses, savings and loans associations authorised to receive deposits from the public, and rural savings and loans banks);

• Specialised companies (such as real estate capitalisation nies, financial leasing companies, factoring companies, surety and warranty companies, fiduciary services companies, and mortgage management companies);

compa-• Investment banks;

• Insurance companies; and

• Companies providing complementary and related services (such as general warehouse storage companies, cash transportation, custody and administration companies, credit and/or debit card issuing com-panies, money transfer companies, and specialised e-money issuers (companies whose purpose is to issue electronic money))

61 In addition to the requirements under the Companies Law and Tax Code, companies performing regulated activities in the financial sector (such

as those enumerated above) are also subject to the requirements to submit ownership and identity information pursuant to their regulation to the SBS Pursuant to article 3 of SBS Resolution No 10440-2008, entities belonging to this category must provide identity information on shareholders and organis-ers (being individuals or legal entities bound to provide capital to the pension fund with at least 4% of the company’s share capital and who are “responsible

to the SBS for the organisation and operation of the company”)

62 In the case of private pension fund administrators (AFPs), Title II

of the Compendium of Superintendence provisions regulating the Private Pension Funds Administration System (approved by Resolution No 054-98-EF/SAFP), governs the type of information that must be submitted by an AFP, including, among others, the identity information of its organisers Such identity information includes the name, number of identification document, nationality, address, profession and stake in the share capital Organisers that are legal entities will also be required to submit their registration number in

the RUC, certificate of registration with SUNARP, and the names,

identifica-tion numbers, naidentifica-tionalities and addresses of legal representatives

63 Further, pursuant to articles 56 and 57 of the Law of the Financial System, all transfers of shares by companies which they regulate must also be registered with the SBS Transfers of shares above 10% of the company’s share capital to a single party or of any percentage of shares belonging to the com-pany’s “organisers” will require pre-authorisation by the SBS Any individual

or legal person who acquires shares in a company, directly or indirectly, in the amount of 1% of the capital over the course of 12 months, or whose combined purchases reach a participation of 3% or higher, is required to provide the SBS with information on its economic activities, asset structures, and names of shareholders, in the case of companies incorporated outside of Peru issuing bearer shares (art 50 Law No 26702) AFPs further have the obligation to inform the SBS of cases where a portion of its shares have been acquired by

a non-resident company and must indicate the names of the shareholders of the acquiring company (art 13-A Consolidated Text of the Law on the Private Pension Fund Administration System) Pre-authorisation by SBS is required where either a resident or non-resident wishes to acquire shares above 10% of

an AFP Information held by the SBS is retained for ten years

64 Article 183 of the Law of the Financial System requires that financial institutions keep their books and documents for a period of not less than ten years Article 375 requires that documents must be kept for the duration of

“an operation” and at least ten years from the financing of the transaction If within that period any legal action is instituted against the financial entity,

the relevant records and documents must be preserved for the duration of the legal action

65 Non-compliance with record-keeping obligations is considered a serious offence under the Law of the Financial System and is punishable as such under CONASEV Resolution No 055-2001-EF/9410 (Annex 5) (the Sanctions Regulations) (approved by SBS Resolution No 816-2005) (see sec-tion A16 below on enforcement for a list of penalties for serious offences) The SBS may further impose sanctions in the form of suspension of share-holder rights (art 210 Sanctions Regulation) Failure to submit the required information upon request by the SBS is also an offence, the penalty for which may entail suspension of the shareholder’s rights (including the right to vote and participate in profits) (art 50 Law No 26702)

The Securities Market Superintendence

66 Any joint stock company can register its shares with the Securities Market Superintendence and list them on the stock exchange Additionally, any legal person that fulfils the requirements established by the Securities Market Law may register any other security under the Securities Market Law Publicly traded companies are required to be registered in the Public Registry

of the Securities Market and come under the supervision of the Securities Market Superintendence (arts 252 and 253 Companies Law), the government agency in charge of the supervision of public offerings and corresponding issuers As a public offering, the registration of securities is also supervised

by the Securities Market Superintendence As of August 2016, there were

275 publicly traded companies operating in Peru under the supervision of the Securities Market Superintendence

67 Prior to being listed on the stock exchange, a company must submit its list of shareholders with more than 5% participation in the share capi-tal, indicating the percentage of holdings by type of share to the Securities Market Superintendencs (Appendix 6 of the Rules of Registration and Exclusion of Securities with the Public Registry of Securities Market and the Stock Exchange (SMV Resolution No 031-2012-SMV-01)) After reg-istration, this information is publicly available on the Securities Market Superintendence website All legal entities with shares listed on the stock exchange must also submit to the Securities Market Superintendence a list of shareholders with voting rights of more than 05%, indicating the percentage owned by each, within the first 15 calendar days after registration and subse-quently, within the first 15 calendar days following the month in which any change occurs (art 12 of the Rules of Indirect Ownership, Relationship and Economic Groups (SMV Resolution No 019-2015-SMV-01))

68 Pursuant to the same rule, foreign companies with shares registered

on the stock exchange of their country of incorporation that intend to pate in the Peruvian securities market must also submit the above lists to the Securities Market Superintendence Securities Market Superintendence As with domestic companies, the list of shareholders with more than a 5% stake in the share capital is publicly accessible The Securities Market Superintendence can impose sanctions for non-compliance with the aforementioned obli-gations Issuers or legal persons under the supervision of the Securities Market Superintendence who fail to submit the requisite information are subject to a reprimand or a fine between 1 and 25 UITs, or PEN 3 850-96 250 (USD 1 160-29 000) (art 31 Sanctions Regulation)) Failure to keep updated books or records is also punishable under article 210 of the Sanctions Regulation (see section A16 on enforcement below for specific penalties)

partici-Company ownership and identity information required to be held by companies

69 Both SAs and SRLs are required to maintain ownership information Article 92 of the Companies Law provides that all companies are required

to maintain a share register detailing the creation of shares as well as the transfers of shares, share exchanges and stock splits and the imposition of duties and taxes on them, limitations on the transfers of shares, and agree-ments between shareholders and third parties relating to the exercise of rights attached to shares A person is not considered an owner of a share or shares until such ownership is registered in the share register (art 92 Companies Law) Where the holding of shares is disputed, the individual registered in the shareholder register will be deemed the lawful holder of the shares unless otherwise stipulated by a court order (art 91 Companies Law)The manager of the company is responsible for maintaining the shareholder register and fail-ure to do so could result in his or her removal from office Failure to maintain the shareholder register during the prescribed period for taxes constitutes an offence punishable with a fine of 03% of the company’s annual net income, but not less than 10% of UIT nor more than 12 UITs, or PEN 385-46 200 (USD 116-13 920) (art 175 Tax Code)

Foreign Companies

70 Pursuant to articles 394 and 403 of the Companies Law, a company incorporated and domiciled (resident) abroad, when carrying out activities

in Peru may either re-incorporate as a Peruvian company, establish a branch

in the country or operate as a permanent establishment of the foreign pany in Peru Foreign companies that choose to re-incorporate in Peru are subsequently considered domiciled in Peru for tax purposes and are taxed on their worldwide income Previously, to establish a branch in Peru or operate

com-as a permanent establishment, at the time of registration with the SUNARP, the foreign company was required to submit: (i) a certificate showing that

the main company is still in existence in its country of origin, (ii) a copy of

the articles of incorporation and by-laws or of the equivalent instruments in the country of origin, and (iii) the agreement to establish the branch in Peru,

including information, such as branch’s place of domicile and the ment of at least one permanent legal representative in Peru Thus unless ownership information was required to be contained in the foreign company’s articles of incorporation in its country of origin, no ownership information would be submitted upon registration

appoint-71 On 24 July 2016, Peru issued Resolution No 178-2016/SUNAT lishing requirements for branches and permanent establishments of foreign companies to register in the RUC Information that must be submitted includes,

estab-inter alia, type and number of identification document (for non-domiciled legal

persons, individuals or entities, this refers to the tax identification number of country of incorporation, or country of residence, if different), full names and details of members or partners, company name (where applicable), and percent-age of shares held Resolution No 178-2016/SUNAT also requires that changes must be notified to the SUNAT within the first ten days in the month following the change Failure to do so is punishable by a fine of 50% of a UIT (art 173(2) Tax Code)

72 In accordance with article 18 of the Regulation for Constitution, Reorganisation and Establishment of Enterprises and Representatives of the Financial and Insurance Systems (approved by SBS Resolution No 10440-2008), foreign companies belonging to the financial and insurance systems must first obtain authorisation from the SBS before establishing a branch in

Peru In those instances, the SBS may request the list of shareholders with

greater than 4% participation in the company’s share capital Article 394 of the Companies Law provides that any company incorporated and domiciled abroad can settle in Peru and maintain its legal personality, if not prohibited

by the law in the company’s home jurisdiction

73 Pursuant to Resolution No 178-2016/SUNAT, foreign companies that have a sufficient nexus to Peru, such as those with permanent estab-lishments in Peru (eg a place of effective management or administration

or other offices in Peru) or those that have established branches in Peru, are considered domiciled for tax purposes and must register in the RUC to obtain a RUC Number before starting their economic activity (see also art 2 Legislative Decree No 943)Peruvian branches and permanent establishments are also required to file annual tax returns for Peruvian-sourced income (art 79 Income Tax Law) and must also provide updated ownership informa-tion in the annual return Further, any changes to partners or members have

to be notified to the SUNAT by the tenth day of the month following the

change Resolution 178 also provides for a transitory provision whereby all foreign companies already registered with the SUNAT has to provide this information by 31 May 2017 The penalty for not complying with this legal requirement is 50% of a UIT (art 173 (2) Tax Code) As of August 2016,

2 567 foreign companies were registered with the SUNAT

74 According to article 394 of the Companies Law, a company porated and domiciled abroad can also re-constitute as a Peruvian company

incor-To do this, a foreign company must deregister from the foreign registry and re-register with SUNARP in the corporate form that it wishes to take As

of August 2016, 482 foreign companies initially incorporated abroad have re-incorporated under Peruvian law Article 135 of the Companies Registry Regulations requires that the public deed of foreign companies wishing to re-incorporate under Peruvian law be notarised and include their social pact

and the articles of association containing, inter alia, identity information on

their owners From the date a foreign company registers its public deed with SUNARP, it has six months to present a document attesting to the cancel-

lation of its registration abroad Therefore, in those cases where foreign

companies already registered in Peru decide to re-incorporate as domestic companies, shareholder information will also be available in the public deed

as maintained by the notary and also with the SUNARP

75 A branch of a foreign company wishing to bid on public contracts

must also register in the National Register of Providers (Registro Nacional

del Proveedores del Estado (RNP) in accordance with article 238 of the

Rules of the Law on Government Procurement, approved by Supreme Decree No 350-2015-EF 10 To register in the RNP, a foreign company must have been incorporated in its home jurisdiction in a manner that is in accordance with the Consolidated Text of Administrative Procedures of the Supervising

Agency of the Government Procurement (Organismo Supervisor de las

Contrataciones del Estado) (OSCE) The foreign company must also present

a copy of its public deed or official letter issued by a registration ity demonstrating registration in its home jurisdiction to the OSCE This document must certify information on the owners of the company (including shareholder information and their participation in share capital)

author-76 In the event that information on distribution of shares cannot be provided in the certifying document, the foreign company must show a Shareholder register or similar document containing such information Within ten days following the end of each month, foreign companies must inform the OSCE of any changes to partners, shareholders, participants or owners

or to distribution of shares Registration in the RNP must be renewed on an 10 A similar registration requirement exists for domestic companies although not considered above in the section on companies incorporated under Peruvian law

annual basis Upon each application for renewal, a foreign company must submit information on their shareholders, partners, and participants or owners Failure to comply with the aforementioned registration provisions will render a company ineligible to participate in public procurement processes (Regulation

of the Government Procurement Law, approved by Supreme Decree No 2015-EF) Foreign companies wishing to contract with public sector entities must be registered with SUNAT In the last three years (2013-15), 1 285 for-eign companies bid on public contracts in Peru (369 in 2013, 432 in 2014, and

350-484 in 2015)

77 Foreign companies wishing to participate in the Peruvian stock market are subject to the same provisions of the Securities Market Law, regu-lated by the Securities Market Superintendence, as are in place for publicly listed domestic companies as described above Currently, 18 foreign compa-nies are listed on the Peruvian Stock Market

78 Under the Offences and Penalties Regulations Concerning the Prevention of Money Laundering and Terrorist Financing (approved by SBS Resolution No 8930-2012), service providers who have not carried out the minimum customer due diligence in identifying their clients and who have not recorded the necessary information in the public deed commit

an offence Under article 40 of the Offences and Penalties Regulation, it

is considered a serious breach to not make “the assessment, identification and categorisation, at least once a year, of money laundering and terrorist financing risks, according to current regulations” Under article 17 of the Regulation, serious breaches are punishable with a fine of between half and

6 UITs for natural persons and between 2 and 20 UITs (PEN 7 700-77 000

or USD 2 320-23 200) in the case of legal persons This rule equally applies

to public notaries, who are also required to undertake the minimum level of Know-Your-Customer measures and due diligence

Nominees

79 Where a legal owner acts on behalf of another person as a nominee

or under a similar arrangement, information on the true or beneficial owner,

as well as other persons in an ownership chain, should be available to a diction’s competent authority to the extent that such information is held by the jurisdiction’s authorities or is within the possession or control of persons within the jurisdiction’s territorial jurisdiction

juris-80 The Peruvian legal system, which is based on civil law, does not recognise the concept of nominee shareholding and the distinction between legal and beneficial ownership Where a person purports to hold property for the benefit of a third person, that third person would have no rights under

Peruvian law to claim the property Further, as discussed in section A12 below, all shares must be nominal

81 Article 1790 of the Civil Code establishes provisions for mandato,

by which an agent (mandatario) is obliged to perform one or more legal acts on behalf, and in the interest, of a principal (the mandante) However, the concept of mandatario is different from the idea of nominee ownership Specifically, a mandatario is not the legal or beneficial owner of shares (and

in fact never takes ownership, legal or otherwise, of any assets covered by the

mandato arrangement), nor does his/her name appear on the stock register

Nevertheless, pursuant to article 2036 of the Civil Code, all mandatos must

be registered with the SUNARP At the time of registration, the public deed

authorising the mandato to act as such must be provided and within this deed all details of the mandate and mandatario are detailed

Conclusion

82 All companies incorporated in Peru are required to keep an updated shareholder register Further, all companies chargeable to tax must register with SUNAT and are subject to annual filing requirements in respect of updated ownership information to meet their tax obligations under the Tax Code Foreign companies carrying on business in Peru may do so either via

a branch, a permanent establishment or by re-incorporating as a Peruvian company In all of those cases, the foreign companies are required to register with both the SUNARP and the SUNAT At the time of registration with the SUNAT, foreign companies must provide ownership information and updated ownership information is also required in their annual tax returns Finally, while Peru does not recognise the concept of nominee ownership, it does

have legal provision for the operation of a “mandato” relationship which will

act as an agent for another legal person, of which ownership information is available in all cases

Bearer shares (ToR A.1.2)

83 Pursuant to article 149 of Supreme Decree No 287-68-HC, bearer shares have been officially prohibited in Peru since 1968 Supreme Decree

Nº 287-68-HC also established a procedure to convert existing bearer shares into nominative shares Decree No 21604 (issued on 1 September 1976) complemented Decree No 287-68-HC by requiring unconverted bearer shares to be cancelled by issuing companies, which would in turn issue new shares of equal value of the cancelled shares, represented by a single certifi-cate on behalf of the issuer, to be registered and offered for sale on the stock exchange Under article 3 of Decree No 21604, all companies with share capital, including limited partnerships by shares, had six months from the

enactment of the Decree to complete the conversion process for all bearer shares No bearer shares after this time would have legal recognition in Peru The conversion process was thus concluded in early 1977

84 The abolition of bearer shares in Peru is further confirmed by cle 45 of Decision 024/1970 of the Andean Community, which mandates that all shares must be nominal As discussed above, decisions of the Andean Community have the force of law in Peru

arti-Partnerships (ToR A.1.3)

85 Under Peruvian law, partnerships have legal personality and come under the same provisions of the Companies Law as are applicable to com-panies As such, partnerships are subject to the same incorporation and registration rules The Companies Law provides for two types of partner-ships, which are as follows:

• General Partnership (Sociedad Colectiva or Collective Society):

A general partnership is a legal person governed by private law In

a general partnership, all partners are jointly and severally liable for the obligations of the partnership All partners have unlimited liabil-ity to third parties (although partners may choose to exercise the right

of excussio, whereby one partner guarantees to act as the principle

debtor As of June 2016, 3 564 general partnerships were registered with SUNARP Of these, 11 were registered with SUNAT

• Limited Liability Partnership (Sociedad de Comandita Simple):

Unlike a general partnership, a limited liability partnership has two classes of members, one that is jointly and severally liable for the obligations of the company (general partner) and one that is liable for the obligations of the company only to the extent of its contribution

to the capital (limited partner) General partners are responsible for the management of the company Should a limited partner assume management responsibilities, however, that partner would acquire the status of a general partner

Limited liability partnerships may take one of two forms: simple or

by shares In a simple limited liability partnership, a limited partner receives no title for his contributions to the company The capital

of partnerships is represented by “participations”, the transfers of which are registrable acts (discussed below), unlike the transfers

of shares (as discussed above in section A11) A limited liability partnership by shares comes under the provisions of the Companies Law applicable to joint stock companies (SAs) The total amount

of the capital is divided into shares and can belong to the general

or limited partners As of June 2016, 3 136 simple limited liability

partnerships and 30 limited liability partnerships by shares were registered with SUNARP ; 14 limited liability partnerships (of which only one is active) and 94 limited liability partnerships by shares (of which 26 are listed as active) were registered with the SUNAT The discrepancy between the numbers of partnerships registered with SUNARP and SUNAT is an issue that should be examined in Peru’s EOIR review

Ownership and identity information required to be provided to

government authorities

86 As a general rule, partnerships formed in Peru must be registered

in the public registry of companies (SUNARP), with the SUNAT, and in a notary public’s archives The registration of a Limited Liability Partnership before SUNAT requires the certified copy of the commercial registra-tion issued by SUNARP, according to the provisions of the Procedure 4 of Annex 1 of the Superintendence Resolution No 210-2004/SUNAT All part-nerships are also required to file annual tax returns with SUNAT

The Superintendence of Public Registries and Notaries

87 To register in the public registry, a partnership must file the deed

or “social pact”, containing identity information on its founding partners, first before a public notary and then with SUNARP Where the founders are natural persons, the social pact must contain his/her full name, address, marital status, and spouse’s name (if applicable) Where a founder is a legal person, the social pact must contain its corporate name, place of incorpora-tion, address, the name of the person who represents the legal person and an attestation of such representation (art 54 Companies Law) The social pact must also contain the contributions of each partner and the share capital and how it is divided (where applicable) Transfers of participations must be reg-istered in the public deed before a notary and with SUNARP (article No 3

of Resolution No 200-2001-SUNARP-SN) Further, pursuant to article 271

of the Companies Law, in the event of transfers of participations in either a general or limited liability partnership, this requires formalisation by public deed before a notary and the updated information is also required to be pro-vided to the SUNARP

88 As with companies, failure to properly register with SUNARP in accordance with the provisions of the Companies Law will result in a part-nership acquiring irregular status Irregular status may be acquired under the

following circumstances: (i) the public deed of formation was not filed before

a notary public with 60 days of signing the social pact, (ii) the public deed

was not granted before a notary public within thirty days after the assembly

at which the signatories to the deed were appointed, (iii) the partnership

was not registered in the public registry within 30 days of the public deed

being granted, (iv) the partnership’s registration was rejected by SUNARP,

(v) where the partnership was transformed without observing the

provi-sions of the Companies Law, or (vi) when activity continues despite having

incurred grounds for dissolution under the Companies Law

The Tax Authority

89 As with companies, partnerships are required to register in the RUC

as maintained by the SUNAT To register in the RUC, partnerships must submit a copy of the certificate of registration with SUNARP and Form 2054, which requires identity information on partners, as well as the percentage share and date of acquisition of all participants Following registration with the SUNAT, the partnership will obtain a tax identification number, which will be used in all future correspondence with the SUNAT (Annex 1 of Superintendence Resolution No 210-2004/SUNAT)

90 Failure to register in the RUC is an offence punishable with a fine

of UIT 1 or confiscation of property or temporary custody of vehicles as appropriate

91 Changes that must be registered with the SUNAT include any changes of partners or participants, as well as issuances, transfers or cancel-lations of participations Actions taken with respect to participations must

be communicated to the SUNAT within one month by filing Virtual Form

1605 (please see section A1 regarding information held by tax authorities in section on companies for a detailed list of the type of information required

in this form)

92 Failure to update information contained in the RUC with the SUNAT

is an offence punishable with a penalty of half a UIT or confiscation of erty Failure to provide documentation on changes in participations within the deadline is punishable by a fine of up to 30% of the UIT (approximately PEN 1 283 or USD 387)

prop-93 Under article 79 of the Income Tax Law, all partnerships less of whether they generate taxable income) are required to file an annual tax return Among the information to be provided in this tax return for each partner is: full name or company name (in the case of a legal person), date

(regard-of birth, type and number (regard-of identity document (in the case (regard-of individuals), country of residence, percentage of ownership and date from which the person became a partner

Ownership and identity information required to be held by the

partnership

94 All partnerships must maintain information on their partners (arts 91 and 92 Companies Law) Partnerships limited by shares are required to main-tain such identity information in shareholder registers All other partnerships are required to maintain this information in their minutes books As with companies, partnerships are also required to document any issuances, trans-fers or cancellations of shares (art 92 Companies Law)

Foreign partnerships

95 As partnerships are treated as companies under the Companies Law, Peruvian authorities have reported that foreign partnerships would have the same treatment as foreign companies Foreign partnerships establishing a branch in Peru would thus be subject to the same registration requirements with SUNARP and the SUNAT as foreign companies Further, as with for-eign companies, foreign partnerships are liable to withholding tax if they have Peruvian-sourced income

Conclusion

96 Comprehensive obligations under the general Companies Law and Peruvian tax law ensure the availability of ownership information concerning domestic partnerships, either in the hands of public authorities (ie public nota-ries, SUNARP and SUNAT) or with the partnership itself Partnerships must submit a public deed including ownership and identity information on all partners with a notary public as well as with SUNARP All transfers of participations must

be registered in a public deed and with the SUNARP, as well as with the SUNAT Further, Partnerships with taxable income must file ownership information annu-ally with SUNAT Foreign partnerships, on the other hand, may not be required

to submit ownership information to a public authority in every case

Trusts (ToR A.1.4)

97 The concept of “trust” does not exist under Peruvian law, and Peru has not signed The Hague Convention of 1 July 1985 on the Law Applicable

to Trusts and on their Recognition There is, however, no obstacle in Peruvian domestic law that prevents a resident from acting as a trustee, or for a foreign trust to invest or acquire assets in Peru

98 Peruvian law provides for the establishment of a “fideicomiso” arrangement, which shares some common law trust-like features The fide-

icomiso is governed by provisions of the Law of the Financial System and is

further regulated by Resolution 1010-1099 of the SBS