Peru and the UK have signed an income and capital gains tax treaty on 20 March 2025.
The agreement seeks to reduce tax base erosion and profit shifting by lowering 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.
This treaty is the first between the two countries and will come into effect once the ratification instruments are exchanged.
