Peru’s Tax Transparency Regime: How Estate Planners Can Avoid Attribution Risks

Peru’s tax transparency regime has sparked debate over its scope and fairness in cross-border estate planning. The law seeks to tax passive income earned through foreign entities controlled by Peruvian tax residents. However, some interpretations suggest that income attribution may occur based solely on capital contributions or voting rights – even in the absence of genuine profit entitlement. This article examines the legal framework and practical implications of Peru’s regime, drawing on international standards such as the OECD guidelines. It argues that income attribution should be based on actual economic benefit, not mere ownership, to prevent overreach and ensure fair taxation of domiciled taxpayers.