PERU Law and Practice Contributed by: Alfred Kossuth Wieland and Edgardo Bernal Santos, Thorne, Echeandia & Lema Abogados
specific outcomes depend on the particular treaty (ie, Canada, Chile, Mexico, etc); and • the possibility for the blocker’s own shareholders to benefit from residence state participation exemp - tions or reliefs on dividends and capital gains, shift - ing tax from Peru to the home state and sometimes General anti-avoidance rules under the current tax regulation empower the tax authority to demand tax payments or reduce credits or losses upon detecting tax avoidance. In this context, tax avoidance refers to actions that either wholly or partially prevent a taxable event, reduce the tax base or tax debt, or improperly gener - ate tax credits, balances or losses through acts that meet two criteria: • they are artificial or unsuitable for achieving their intended purposes; and • their legal or economic effects, apart from tax ben - efits, are equivalent or similar to those achievable through proper or customary acts. lowering the overall burden. 9.5 Anti-Evasion Regimes Specific anti-avoidance rules may also apply, for example, in M&A transactions, cross-border loans, intercompany loans and tax haven expenses, among others. Tax planning is legal in Peru but is limited to transac - tions not involving avoidance. As an “option econ - omy”, this limits taxpayers’ ability to engage in tax saving schemes, unless they can demonstrate that the transactions and structures were motivated by eco - nomic, financial, corporate or other reasons different from solely obtaining tax advantages. 10. Employment and Labour 10.1 Employment and Labour Framework In Peru, the legal and regulatory framework regarding labour is based primarily on the Political Constitution, the Consolidated Text of the Labour Productivity and Competitiveness Law, and related supplementary reg - ulations governing hiring, working hours, remunera -
tion, termination of employment and collective bar - gaining. This framework is characterised by a strong level of employee protection and active oversight by the National Superintendency of Labour Inspection (SUNAFIL). Collective bargaining agreements and trade union organisations exist and are legally recog - nised. As of March 2025, according to the Ministry of Labour and Employment Promotion, the unionisation rates stand at 9% in the formal sector, 5% in the pri - vate sector, and 18% in the public sector. For a foreign investor considering making FDI in Peru, it is particularly important to take into account the regime applicable to micro and small enterpris - es, which establishes a special labour regime with reduced costs and obligations for such entities. Other relevant regulations must also be considered, includ - ing restrictions on the employment of foreign workers, occupational health and safety regulations, and the supervisory and enforcement role of SUNAFIL, which imposes severe administrative sanctions in cases of non-compliance. This makes proper labour planning and regulatory compliance essential from the outset of the investment. 10.2 Employee Compensation In Peru, employee compensation is structured pri - marily around the payment of a monthly salary, sup - plemented by mandatory statutory benefits such as the statutory bonuses paid in July and December, the Compensation for Time of Service (CTS), paid annual leave, the family allowance where applicable, and mandatory contributions to the health social security system (EsSalud) and to the pension system (either the National Pension System or the Private Pension System). Voluntary or collectively agreed benefits may also apply, including performance bonuses, variable incentive schemes, private insurance coverage, meal vouchers or supplementary pension plans. In the context of acquisitions, changes of control or other investment transactions, employee compensa - tion is generally preserved pursuant to the principle of continuity of employment, whereby the new employer assumes all existing rights and obligations, including salaries and benefits agreed on an individual or col - lective basis.
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