Our client is a Swiss Bank that wills to enter into lending business in Peru. For these purposes, we were asked to make a jurisdictional analysis regarding tax aspects on cross-border lending activities. Our labour consisted in analysing different questions proposed by our client, with a special emphasis in the risk of configuration of a permanent establishment, taxation applicable to loan interest and double taxation avoidance. Likewise, we were asked to analyse the application of Rule XVI of the Peruvian Tax Code establishes a general anti-avoidance rule (GAAR) in a specific case that involved a loan granted to a usufructuary shareholder of a Peruvian company with a cross pledge on the assets held by such company.
