Tightening the reins

Peru eyes OECD membership with actions against money laundering and tax evasion.

The National Superintendence of Customs and Tax Administrations (“SUNAT”) has stepped up its measures to combat tax evasion and money laundering in Peru. The measures follow a 2018 legislative decree passed by the Peruvian Congress to comply with OECD tax recommendations.

A banking executive in Peru commented, “Peru is applying for membership of the OECD which means it must raise its game on AML and tax evasion. Years ago, SUNAT issued an announcement that it has information on companies, that it knows what the evasion methods are, and that it was ready to exchange information. 2020 was the year in which SUNAT could go out to audit these firms, but the pandemic slowed down everything.”

“Peru is applying for membership of the OECD which means it must raise its game on AML and tax evasion.”

Banking executive, Peru

Enrique Vera (“Vera”), head of SUNAT said that in October 2020 Peru successfully accomplished the OECD data protection and client confidentiality requirements to be considered a “reciprocating jurisdiction”. This allows SUNAT to exchange financial and tax information with its counterparts in third countries.

Shortly after receiving the green light from the OECD, in December 2020, SUNAT sent tax information on Peruvian citizens to a number of countries which included Cayman Islands, Belgium, Slovenia, Italy, Netherlands, Switzerland and Japan to determine if Peruvian taxpayers were involved in tax evasion by opening accounts and tax efficient structures outside the country.

By March 2021, SUNAT said that it received information on 43,000 Peruvian nationals which hold USD 12 billion abroad. From this amount, USD 7 billion were reportedly deposited in Switzerland and the Cayman Islands.

The financial information obtained by SUNAT from third countries will be added to a tax compliance and operations risk form to determine if the source of funds was previously declared to Peruvian tax authorities. However, tax authorities did not offer further details on potential legal action against undeclared funds.

Peruvian authorities expect that the amount will significantly increase as the exchange of information continues over the coming months. At present, information exchanged by SUNAT mostly consists of details of international bank transfers, registration details of local bank accounts held in Peru and ultimate business owner information for Peruvian companies.

The CEO of one of the largest accountancy firms operating in Peru had some concerns around how effective the new initiative would be, “Two key elements are still missing: firstly SUNAT needs a highly specialised and competent team and secondly we need to see internal rules that will allow other entities, such as banks and other companies, to work together.”

“Two key elements are still missing: firstly SUNAT needs a highly specialised and competent team and secondly we need to see internal rules that will allow other entities to work together.”

CEO, accountancy firm, Peru

At a local level, SUNAT will implement a system for the exchange of tax information with local authorities to strengthen best practices in all levels of its administration. Amid concerns that these measures could challenge bank secrecy regulations in Peru, Vera said that these new measures would not breach bank secrecy in the country, which is protected by the Constitution and can only be lifted by judicial authorities.

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