Peruvian Tax Court establishes guidelines that entities must meet to qualify as beneficial owners under Peru-Chile income tax treaty

Entities that qualify as a conduit company will not qualify as beneficial owner under the Peru-Chile income tax treaty, so payments they receive will be subject to a higher rate of withholding tax under Peruvian tax law.

The Peruvian Tax Court recently published Resolution 03306-9-2020, establishing guidelines for entities to qualify as beneficial owners, which are entitled to benefits under the Peru-Chile double tax treaty.

Background

A Peruvian taxpayer applied a 15% withholding tax (WHT) rate to…