The Peruvian tax authority, SUNAT, requires that legal entities and legal companies submit Ultime Beneficial Owner (UBO) information. Among other things, this is to prevent tax avoidance, money laundering and the financing of terrorism. This regulation also allows Peru to comply with its obligations concerning mutual administrative assistance in tax matters.

The Supreme Decree 003-2019-EF was issued on 8 January 2019. In addition, SUNAT has issued a Superintendent Resolution (No. 185-2019 / SUNAT), which describes the submission of the UBO tax return.

Who is the UBO?

The legislative resolution sets out several criteria to determine the UBO, which include the following:

1. The natural person who directly or indirectly holds at least 10% of the capital of the company.
2. The natural person who occupies the highest administrative position in the legal person (i.e. CEO, board member or similar).
3. The natural person who has the effective control of a customer.

The phrase “effective control” refers to situations in which ownership and/or control is exercised through a chain of ownership or by any other means that is not direct control. Thus, the term “customer” shall be understood as an individual or legal person, national or foreign, who requests and receives from the obligated party the provision of a service, the supply of goods or a product.

Criteria 1 and 2 above are not alternative options, but gradual measures which means that the second and third criteria shall only be applicable if the preceding criterion is not sufficient to identify the ultimate beneficial owner.

Chain of ownership means those cases in which indirect ownership is held through other legal entities.

Who is required to submit the UBO tax return – Virtual Form 3800?

Legal entities domiciled in Peru and legal arrangements established therein (e.g. trusts, investment funds, consortiums etc.) are required to identify their ultimate beneficial owner. They must obtain, update, declare, retain and provide information on ultimate beneficial owners, including documentary support.

It should be noted that, in the case of legal entities incorporated outside Peru, the obligation lies with the branch, agency, or permanent establishment in Peru.

Likewise, any foreign fund or foreign trust that is managed by a Peruvian administrator, either an entity or an individual, is obliged to provide information.

What are the considerations for the return and the consequences for non-compliance?

The Virtual Form 3800 return must contain the information about the UBO which must be submitted to SUNAT in compliance with the legislative resolution mentioned above and its regulatory norm.

Until today, the SUNAT through Resolution 185-2019/SUNAT has only established a deadline schedule for primary taxpayers (PRICOS). It is expected that another resolution will be published shortly so that medium-sized companies can comply and submit the above mentioned tax return.

It is important to note that the deadline for the PRICOS to submit the UBO Virtual Form 3800 – informative tax return is in December with the November tax period.

Non-compliance in the form of not providing the sworn statement on the final beneficiaries would result in a tax offense with a tax penalty of up to 50 UIT – income is calculated according to the UIT control unit (Unidad Impositiva Tributaria). 50 UIT is the equivalent of around PEN 210,000 (approx. EUR 56,700 or USD 62,500 as of 11 Nov. 2019)

If such a declaration is submitted incompletely or if the information is not available for the retention period of five years, a fine of up to 25 UIT (PEN 105,000) would be incurred.

Finally, it is highly recommended that companies begin to research and identify ultimate beneficial owners, as the search for these could be complicated by the absence of documentation or delays in the request for information, explain the Ecovis experts. It is worth mentioning that a breach of the legal norm could also have consequences of joint liability for legal representatives.

Further important information

It is highly recommendable that the Legal entities implement an internal UBO policy in order to define the essential mechanisms to obtain, save, and update the UBO information and comply with due diligence procedures. If legal entities cannot identify the UBO information, they will be obliged to provide information about their situations on their webpage or via the official Peruvian daily newspaper “El Peruano”.

Author: Cindy Steffani Salvador Márquez, Tax & Legal Manager, ECOVIS Peru, Lima, Peru