13 June 2023 Peruvian Supreme Court enacts a mandatory ruling regarding Certificates of Residence for Double Tax Treaty purposes On 2 June 2023, the Peruvian Supreme Court of Justice enacted Court Ruling 8380–2021-LIMA, which is mandatory caselaw, establishing that noncompliance with domestic requirements for certificates of residence should not prevent the application of the benefits of Double Tax Treaties (DTT) subscribed by Peru. According to Supreme Decree 090-2008, for purposes of Double Tax Treaties benefits, nonresidents must deliver to the withholding agent (Peruvian entity) a residence certificate with the following requirements:
In the absence of a certificate of residence that meets the above requirements, the withholding agent must perform the withholding without taking into account the reduced withholding or the benefits granted by the Double Tax Treaty. On 9 June 2023, the Supreme Court enacted Court Ruling 8380–2021, analyzing the case of the Peru-Brazil Double Tax Treaty and the certificate of residence. The Court concluded that noncompliance with domestic requirements for certificates of residence (e.g., having the certificate of residence issued prior to the payment) should not prevent the benefits of the Peru-Brazil Double Tax Treaty from applying, as long as this requirement is not included in the Double Tax Treaty. Although the ruling analyzes a case under the Peru-Brazil Double Tax Treaty, the criterion may also be applicable to other Double Tax Treaties subscribed by Peru. The Court's decision could be useful in a refund claim if the resident payor has performed a withholding without taking into account the reduced withholding or the benefits granted by the Double Tax Treaty and the certificate of residence does not comply with the requirements established by the domestic law.
Document ID: 2023-1051 |
