Peru has a small tax treaty network with ten treaties in force, all but one of which contain a provision for the Mutual Agreement Procedure (MAP) for resolving tax treaty disputes. While most of its treaties align with the Action 14 Minimum Standard, Peru needs to amend eight of them to fully comply. The Multilateral Instrument is expected to modify three of these treaties, while Peru plans bilateral negotiations for the remaining five.
Peru partially meets the standard regarding dispute prevention, as it lacks a mechanism for rolling back bilateral Advance Pricing Arrangements (APAs). However, it provides access to MAP in most eligible cases, including transfer pricing disputes and anti-abuse provisions. Notably, Peru denies MAP access if judicial remedies are pending or concluded, a policy inconsistent with the standard.
MAP statistics for 2017-22 show an average resolution time of 12.51 months, with 80% of cases closed within the 24-month target. Peru is adequately resourced for MAP, employing three part-time staff members who receive regular training.
The main area for improvement is the implementation of MAP agreements, as Peru's domestic statute of limitation could hinder the execution of agreements under certain tax treaties. Peru should establish procedures to address this issue and ensure timely implementation of MAP outcomes.
