Peru Introduces Regulations to Disclose Ultimate Beneficial Ownership of Entities
In a move aimed at increasing transparency and combating tax evasion, Peru’s Minister of Economics has issued Supreme Decree 003-2019-EF, which outlines regulations on disclosing the ultimate beneficial ownership of entities in the country.
Background
The decree, which came into effect on January 9, 2019, is a key component of Legislative Decree 1372, enacted in August 2018. This move is seen as a significant step towards increasing transparency in Peru’s financial system and combating tax evasion.
Entities Required to Disclose
Under the new regulations, various types of entities are required to report and identify their ultimate beneficial owners to the Peruvian Tax Authority. These include:
- Peruvian entities incorporated in Peru: All Peruvian entities must disclose their ultimate beneficial ownership.
- Non-Peruvian entities with a presence in Peru: Entities that have a branch or permanent establishment in the country, are managed by a Peruvian administrator, or have a Peruvian resident as one of its parties are also required to disclose.
Definition of Ultimate Beneficial Owner
An individual is deemed a beneficial owner if they hold at least 10% of an entity’s capital. In cases where it is not possible to determine the ultimate beneficial ownership, directly or indirectly, the individual holding the highest administrative position will be considered the beneficial owner.
Filing Requirements
Entities must complete a special form and file it with the Peruvian Tax Administration. The regulations also require entities to implement mechanisms to obtain and keep updated information on their ultimate beneficial owners.
Implications
The move is expected to have far-reaching implications for individuals and companies operating in the country, requiring them to provide detailed information about their ownership structures. It is a significant step towards increasing transparency in Peru’s financial system and combating tax evasion.
Note: This article is based on publicly available information and has not been independently verified by the author.