Tax Information Exchange Agreement (1990)
This Treaty was signed on February 15, 1990 and entered into force on March, 31, 1993.
ARTICLE 1. OBJECT AND SCOPE OF APPLICATION
1.1 The Government of the United States of America and the Government of the Republic of Peru, desiring to assure the accurate determination and collection of taxes, to prevent tax fraud and evasion, and to develop better sources of information for tax matters, and understanding the need for mutual collaboration for the purpose of penalizing violations of public and social norms relating to tax evasion, have agreed to provide each other assistance through the exchange of information, as provided in this Agreement for the Exchange of Tax Information.
1.2 Information shall be exchanged to fulfill the purpose of this Agreement, within the context of the strictest reciprocity, under full responsibility, and independent of whether the person to whom the information relates is, or whether the information is held by, a resident or national of a Contracting State.
1.3 The mutual assistance that the Contracting States shall provide each other to carry out the objective of this Agreement shall be in conformity with, and subject to, the limitations established by their respective national laws and other regulations.
1.4 The requests for assistance presented under the terms of this Agreement shall be executed pursuant to the provisions of paragraph 1.3, except that:
a) execution of the request would require the requested State to exceed its authority or would otherwise be prohibited by legal provisions in force in that State, or when the information requested is not obtainable under the laws or in the normal course of the administration of the requested State or of the other Contracting State, in which case the competent authorities of both Contracting States shall consult with each other to agree upon alternative lawful means for securing assistance;
b) execution of the request would in the judgment of the requested State be contrary to its national security or public policy;
c) to supply information would disclose any trade, business, industrial, commercial, or professional secret or trade process;
d) to supply information requested by the applicant State to administer or enforce a provision of the tax law of the applicant State, or any requirement connected therewith, would discriminate against a national of the requested State. A provision of tax law, or connected requirement, will be considered to be discriminatory against a national of the requested State if it is different or more burdensome with respect to a national of the requested State than with respect to a national of the applicant State in the same circumstances. For purposes of the preceding sentence, a national of the applicant State who is subject to tax on worldwide income is not in the same circumstances as a national of the requested State who is not subject to such taxation. The provisions of this subparagraph shall not be construed to prevent the exchange of information with respect to taxes imposed by the Government of the United States of America or the Government of Peru, on branch profits or the excess interest of a branch or on the premium income of foreign insurers;
e) the request does not comply with the provisions of this Agreement.
1.5 The Contracting States shall provide assistance through exchange of information authorized pursuant to Article 4 and such related measures as may be agreed upon by the competent authorities pursuant to Article 5 of this Agreement.
ARTICLE 2. TAXES COVERED BY THE AGREEMENT
2.1 This Agreement shall apply to the following taxes imposed by or on behalf of a Contracting State:
a) in the case of the United States of America, the taxes administered by the federal government which are indicated below:
(i) Federal income taxes,
(ii) Federal taxes on self-employment income,
(iii) Federal taxes on transfers to avoid income tax,
(iv) Federal estate and gift taxes,
(v) Federal excise taxes, and
b) in the case of Peru, the taxes administered by the National Superintendency of Tax Administration which taxes are indicated below:
(i) Taxes on revenues (income and other revenues);
(ii) Excise taxes (general sales taxes, selective excise taxes, and other taxes);
(iii) Taxes on assets (net personal assets, business assets, and other assets);
(iv) Transfer taxes.
2.2 This Agreement shall apply also to any taxes imposed after the date of signature of the Agreement in addition to, or in place of, the existing taxes. The competent authority of each Contracting State shall notify the other of changes in laws which may affect the obligations of that State pursuant to this Agreement.
2.3 This Agreement shall not apply to the extent that an action or proceeding concerning taxes covered by this Agreement is barred by the applicant State’s laws.
2.4 This Agreement shall not apply to taxes imposed by states, municipalities, regions, or other political subdivisions, or possessions under the jurisdiction of a Contracting State.
ARTICLE 3. DEFINITIONS
3.1 For purposes of this Agreement:
a) The term “competent authority” means:
(i) in the case of the United States of America, the Secretary of the Treasury or his delegate, and
(ii) in the case of Peru, the National Superintendent of Tax Administration.
b) The term “national” means:
(i) in the case of the United States, any United States citizen and any legal person, partnership, corporation, trust, estate, association, or other entity deriving its status as such from the laws in force in the United States of America; and
(ii) in the case of Peru, any individual, conjugal society, estate, or legal person, or other entity that, in accordance with Peruvian tax legislation, has legal existence and is considered domiciled in the country.
c) The term “person” means any individual or legal person, including a partnership, corporation, trust, association, estate, or other legal entity.
d) The term “tax” means any tax to which the Agreement applies.
e) The term “information” means any fact or statement, in any form whatever, that may be relevant or material to tax administration and enforcement, including but not limited to:
(i) testimony of an individual, and
(ii) documents, records or movable or immovable property of a person or Contracting State.
f) The terms “applicant State” and “requested State” mean, respectively, the Contracting State applying for or receiving information and the Contracting State providing or requested to provide such information.
g) For purposes of determining the geographical area within which this Agreement shall be applied, the term “United States” means the “United States of America,” including Puerto Rico, the Virgin Islands, Guam, and any other United States possession or territory, and the term “Peru” means the “Republic of Peru,” including all of the national territory, its waters, jurisdictional air space and any place over which it has authority.
3.2 Any term not defined in this Agreement, unless the context otherwise requires or the competent authorities agree to a common meaning pursuant to the provisions of Article 5, shall have the meaning which it has under the laws of the Contracting State relating to the taxes which are the subject of this Agreement.
ARTICLE 4. EXCHANGE OF INFORMATION
4.1 The competent authorities of the Contracting States shall exchange information to administer and enforce the domestic laws of the Contracting States corresponding to the taxes covered by this Agreement, including information to effect the determination, assessment, and collection of tax, the recovery and enforcement of tax claims, as well as the investigation or prosecution of tax crimes or crimes involving the contravention of tax administration.
4.2 The competent authorities of the Contracting States shall automatically transmit information to each other for the purposes referred to in paragraph 4.1. The competent authorities shall determine the information to be exchanged pursuant to this paragraph and the procedures to be used in the exchange of such information.
4.3 The competent authority of a Contracting State shall transmit to the competent authority of the other State information which has come to its attention which is likely to be relevant to, and contribute significantly to, accomplishment of the purposes referred to in paragraph 4.1. The competent authorities shall determine the information to be exchanged pursuant to this paragraph, adopting and implementing the procedures that are necessary to ensure that the information is forwarded to the competent authority of the other Contracting State.
4.4 The competent authority of the requested State shall provide information upon request by the competent authority of the applicant State for the purposes referred to in paragraph 4.1. If the information available in the tax files of the requested State is not sufficient to enable compliance with the request, that State shall take all relevant measures to provide the applicant State with the information requested.
a) The requested State shall have the authority to:
(i) examine any books, papers, records, or other movable property or documents relating to immovable property which may be relevant or material to such inquiry;
(ii) question any person having knowledge or in possession, custody or control of information which may be relevant or material to such inquiry; and also to compel such person to appear at a stated time and place and testify under oath and produce books, papers, records, or other movable property, or documents relating to immovable property.
b) Laws or practices of the requested State pertaining to disclosure of information by banks, nominees or persons acting in an agency or fiduciary capacity, or respecting ownership of interests in a person (other than an individual) shall not prevent or otherwise affect the authority of the requested State described in subparagraph a). The competent authorities of the Contracting State shall have authority to obtain and provide information notwithstanding such disclosure laws and practices.
c) Privileges under the laws or practices of the applicant State shall not apply in the execution of a request in the requested State. Claims of privilege under the laws or practices of the applicant State shall be determined exclusively by the courts of that State, and claims of privilege under the laws or practices of the requested State shall be determined exclusively by the courts of that State.
4.5 If information is requested by a Contracting State pursuant to paragraph 4.4, the requested State shall obtain it and provide it in the same form, as if the tax of the applicant State were the tax of the requested State and were being imposed by the requested State. However, if specifically requested by the competent authority of the applicant State, the requested State:
a) shall specify the time and place for the taking of testimony under oath, and/or the production of books, papers, records, and other movable property and for the inspection of immovable property;
b) shall permit the presence of those individuals designated by the competent authority of the applicant State as being involved in or affected by execution of the request, including the obligated person in the case of Peru, and the obligated person and the accused in the case of the United States, his legal representative, individuals charged with the administration and enforcement of the domestic laws of the applicant State covered by this Agreement, and a commissioner or official present for the purpose of rendering evidentiary rulings or determining issues of privilege under the laws of the applicant State;
c) shall provide individuals referred to in subparagraph b) with an opportunity to question, directly or through the executing authority, the individual giving testimony or producing books, papers, records and other movable property or documents relating to immovable property;
d) shall secure original and unedited books, papers, records, and other movable property or documents relating to immovable property;
e) shall secure or produce true and correct copies of original and unedited books, papers and records;
f) shall determine the authenticity of books, papers, records and other property produced;
g) shall examine the individual producing books, papers, records and other property regarding the purpose for which and the manner in which the item produced is or was maintained;
h) shall permit the competent authority of the applicant State to provide written questions about the item produced which shall be answered by the individual producing books, papers, records and other movable property;
i) shall certify either that procedures requested by the competent authority of the applicant State were followed or that the procedures requested could not be followed, with an explanation of the deviation and the reason therefor;
j) shall perform any other act not in violation of the laws or at variance with the administrative practice of the requested State.
4.6 Except as provided in paragraph 1.4, the provisions of the preceding paragraphs shall be construed so as to impose on a Contracting State the obligation to use all legal means and its best efforts to execute a request. A Contracting State may, in its discretion, take measures to obtain and transmit to the other State information which, pursuant to paragraph 1.4, it has no obligation to transmit.
4.7 The competent authority of the requested State shall allow representatives of the applicant State to enter the requested State to interview individuals and examine books and records with the consent of the individuals contacted.
4.8 Any information received by a Contracting State shall be treated as secret in the same manner as information obtained under the domestic laws of that State and shall be disclosed only to authorities, including judicial or and administrative bodies involved in the determination, assessment, collection, and administration of the taxes which are the subject of this Agreement, the recovery and collection of tax claims, the enforcement or prosecution of tax crimes, or the determination of appeals in respect of such taxes, as well as the oversight of the above. Such authorities shall use the information only for such purposes, and such information may only be disclosed by these authorities in public court proceedings or in judicial decisions.
ARTICLE 5. MUTUAL AGREEMENT PROCEDURE
5.1 The competent authorities of the Contracting States shall agree to implement a program to carry out the purposes of this Agreement. This program may include, in addition to the exchanges of information specified in Article 4, other measures to improve tax compliance, such as exchanges of technical know-how, development of new audit techniques (including simultaneous examinations and simultaneous criminal investigations in their respective jurisdictions and by their respective competent authorities), identification of new areas of non-compliance, and joint studies of such areas.
5.2 The competent authorities of the Contracting States shall endeavor to resolve by mutual agreement any difficulties or doubts arising as to the interpretation or application of this Agreement. In accordance with the foregoing, the competent authorities may agree to a common meaning of a term and may determine when costs are extraordinary for purposes of Article 6.
5.3 The competent authorities of the Contracting States may communicate with each other directly for the purposes of reaching an agreement under this Article.
ARTICLE 6. COSTS
6.1 Unless the competent authorities of the Contracting States otherwise agree, ordinary costs incurred in providing assistance shall be borne by the requested State and extraordinary costs incurred in providing assistance shall be borne by the applicant State.
ARTICLE 7. ENTRY INTO FORCE
7.1 This Agreement shall enter into force upon an exchange of notes by the duly authorized representatives of the Contracting States confirming their mutual agreement that both sides have met all constitutional and statutory requirements necessary to effectuate this Agreement.
ARTICLE 8. MODIFICATION AND TERMINATION
8.1 This Agreement may be modified or amended with the agreement of the Contracting States.
8.2 This Agreement shall remain in force until terminated by one of the Contracting States. Either Contracting State may terminate the Agreement at any time after the Agreement enters into force provided that at least 3 months prior notice of termination has been given through diplomatic channels.
DONE at Cartagena, Colombia in duplicate, in the English and Spanish languages, the two texts having equal authenticity, this 15th day of February, 1990.
FOR THE REPUBLIC OF PERU:
FOR THE UNITED STATES OF AMERICA: