January 4, 2023
Peru extends temporary capital gain tax exemption for securities transferred through Lima Stock Exchange subject to certain restrictions
On 30 December 2022, Peru’s President enacted Law 31662 amending the temporary tax exemption for capital gains derived from the transfer of securities through the LSE.
In 2015, Peru enacted Law 30341, which temporarily exempts from CGT the transfer of securities listed and traded through the LSE until 31 December 2022, if the below requirements are met:
Law 31662 establishes new conditions, in addition to the abovementioned requirements, for the application of the CGT exempton, as follows:
Consequently, foreign or domestic institutional investors will be subject to Peruvian taxation as from January 2023. It is important to note, however, that transactions executed for foreign institutional investors within the LSE will be subject to a 5% CGT. In addition, off stock transactions executed by foreign institutional investors will be subjected to a 30% CGT.
The tax exemption is valid until 31 December 2023.
For additional information with respect to this Alert, please contact the following:
Ernst & Young Asesores S.C.R.L, Lima
Ernst & Young LLP (United States), Latin American Business Center, New York
Ernst & Young LLP (United Kingdom), Latin American Business Center, London
Ernst & Young Tax Co., Latin American Business Center, Japan & Asia Pacific