The Supreme Decree formalises the treaty, cutting withholding taxes on cross-border income and including measures against tax evasion and treaty abuse.
Peru approved the 2025 Income Tax Treaty with the UK through Supreme Decree No. 051-2025-RE on 20 November 2025, with the ratification published in the Official Gazette on 21 November 2025.
The agreement aims to mitigate tax base erosion and profit shifting by reducing withholding tax rates on cross-border income. It caps dividend withholding tax at 10%, with a 15% rate for dividends linked to immovable property. Interest is capped at 10%, and royalties at 15%.
The treaty also includes safeguards against tax evasion, avoidance, and treaty shopping, along with provisions to address treaty abuse, prevent artificial avoidance of permanent establishment status, and improve dispute resolution.
Earlier, Peru’s Congress approved the tax treaty with the UK on 6 November 2025.
