PERU Law and Practice Contributed by: Percy Castle, Violeta Moncada, Angel Quispe and Dayana Evangelista, Casahierro Abogados
registered, the transfer is enforceable against third parties, thereby providing the trust estate with legal certainty, public notice and enhanced asset protec - tion. Consequently, although foreign trusts are not specifi - cally regulated under Peruvian law, their legal effects are generally recognised and assessed on a case-by- case basis by the Peruvian public registries and other competent authorities, subject to compliance with the applicable rules of private international law, public policy and any mandatory provisions of Peruvian law. For tax purposes, Peruvian trusts are treated as trans - parent (non-opaque) entities. The applicable tax rates are determined by the specific nature of the income earned, which is attributed directly to the settlor or beneficiaries, depending on the trust’s structure. 3.3 Taxation of Trusts, Foundations and Similar Entities Located in Other Jurisdictions When a Peruvian citizen or resident serves as a fiduci - ary or is a beneficiary of a trust, foundation, or similar entity established abroad, several tax consequences may arise. Peru’s tax and transparency framework is designed to capture these roles, even when the struc - ture is offshore. Fiduciary and beneficiary roles in foreign trusts or foundations are fully visible to SUNAT under UBO rules. While distributions may be taxable depending on their nature, careful structuring allows for estate planning benefits – such as continuity of basis and optimised allocation of income – provided transpar - ency and substance requirements are met. 3.4 Tax Consequences of Fiduciary and Beneficiary Roles When a Peruvian resident acts simultaneously as donor/settlor and fiduciary (trustee) or as a beneficiary and fiduciary of a foreign trust, foundation, or similar entity, the tax consequences are shaped by Peru’s transparency and anti-avoidance rules. Fiduciaries, donors and beneficiaries are all treated as UBOs. Fiduciary status itself does not generate tax - able income, but the donor’s control may trigger scru - tiny to ensure the trust/foundation is not used to defer
or avoid taxation. Nevertheless, it should be noted that, since there is no specific tax regulation governing trusts in Peru, SUNAT cannot impose joint liability on the fiduciary for their administration. In practice, there does not appear to be any cases in which the fiduciary has been held responsible for taxes unpaid on income generated or distributed by the trust. The tax obliga - tion is instead enforced against the beneficiary or the settlor of the trust. Notwithstanding the foregoing, it should be noted that under Peruvian law, both the Income Tax Law and the Tax Code provide that, in the case of bank trusts, the trustee may be held jointly and severally liable for the nonpayment of taxes. In all other cases, liability may only be imposed upon proof of fraud, gross neg - ligence, or abuse of authority. In Peru, the trust is the most widely used mechanism for asset protection, regulated by the General Law of the Financial System and Insurance System (Law No. 26702). Under this structure, specific assets are transferred to an autonomous estate administered by an authorised fiduciary, remaining separate from the patrimony of the settlor, the fiduciary, and the benefi - ciaries. The principal advantage of the trust lies in the creation of an autonomous estate that is not liable for the personal obligations of the settlor, fiduciary or beneficiaries. Nevertheless, certain limitations must be considered: • Asset transfers may be challenged in court if proven to have been carried out in fraud of credi - tors or as an abuse of rights. • Succession law restrictions prevent the use of trusts to circumvent mandatory inheritance rules, including those related to forced heirship, requiring case by case analysis. • Compliance obligations must be observed in relation to taxation, anti money laundering, fis - cal transparency, and ultimate beneficial owner identification, as explained in other sections of this document. 4. Family Business Planning 4.1 Asset Protection
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