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24 March 2025

Peru and United Kingdom sign double-tax treaty

  • On 20 March 2025, Peru and the United Kingdom signed a double-tax treaty (DTT) after nearly two decades of negotiations.
  • The DTT will enter into force 30 days after both countries complete their domestic procedures, including approval by Peru's Congress and ratification by the Executive.
  • The provisions of the DTT are expected to take effect, at the soonest, from 1 January 2026.
  • This treaty is anticipated to enhance cross-border trade and investment, with the aim of offering affected taxpayers greater certainty and stability in their operations within both jurisdictions.
 

On 20 March 2025, Peru and the United Kingdom signed the double-tax treaty (DTT), following years of negotiations. The DTT is set to take effect upon the completion of domestic procedures.

Peru and the United Kingdom commenced their first round of negotiations regarding a DTT in Lima on 14 November 2006. Negotiations were concluded on 17 May 2024. Finally, on 20 March 2025, Peru and the United Kingdom signed the DTT in London.

The following procedures will need to be performed in Peru for the DTT to enter into force:

  • Congress must approve the treaty text.
  • The Executive must ratify the treaty text.
  • Both of the contracting states must notify one another through diplomatic channels.

Upon the completion of these steps, the DTT will enter into force 30 days after the last notification.

The provisions of the DTT will take effect from 1 January of the calendar year immediately following the year in which the DTT enters into force, which could mean as early as 1 January 2026.

Entities in Peru and the United Kingdom should review the provisions of the DTT to ensure proper application in their operations. This treaty is expected to significantly enhance cross-border trade and investment, helping to provide certainty and long-term stability for companies in both jurisdictions, thereby improving their bilateral relationship.

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Contact Information

For additional information concerning this Alert, please contact:

Ernst & Young Asesores Empresariales S.C.R.L, Lima

Ernst & Young LLP (United States), Latin American Business Center, New York

Ernst & Young LLP (United Kingdom), Latin American Business Center, London

Ernst & Young Tax Co., Latin American Business Center, Japan & Asia Pacific

Published by NTD’s Tax Technical Knowledge Services group; Carolyn Wright, legal editor

Document ID: 2025-0734

 

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