Individuals domiciled in Peru are taxed on their worldwide income. Non-domiciled individuals are taxed in their Peruvian income source only. 

In the case of domiciled individuals, the net income from foreign sources must be added to the net employment income, and the tax is calculated on the total of these combined incomes.

Peru’s tax regime includes Controlled Foreign Corporation (CFC) rules. As such, domiciled individuals must include their proportional share of the CFC’s passive net income (such as interest, dividends, royalties and capital gains) in their annual taxable income, regardless of whether the income has been distributed.

With regard to local fideicomisos (Peruvian trusts), Peru has a specific tax regime created under Peruvian law. These trusts are considered fiscally transparent (pass-through) vehicles, meaning that the income generated through them is directly attributed to the settlor, who is considered the taxpayer.

In cases where the settlors are individuals, the applicable tax treatment will depend on whether they are considered domiciled or not.

In addition, certain categories of capital income, such as dividends, interest and foreign-source income, are subject to tax deferral rules. Under these rules, the payment of income tax on these types of income may be deferred until they are distributed to the individual taxpayer.

If the trust deed provides that the assets transferred to the trust can revert to the settlor, any transfer of the referred assets into or out of the trust will not be subject to taxation in Peru.

Peru does not have an estate, inheritance, gift, or similar transfer tax. As such, there are no exemptions available, whether annual, lifetime, or purpose-based (eg, for health or education). Real estate and securities received as gifts or heritage by individuals are not granted a tax basis or limited to the documented tax basis incurred by the transferor.

However, individuals who purchase real estate in Peru may be subject to a real estate transfer tax known as the Impuesto de Alcabala (the “Alcabala tax”). This tax is levied at a rate of 3% on the purchase price, with certain exemptions applicable depending on the specific circumstances.

Additionally, all real estate in Peru is subject to an annual municipal property tax known as Impuesto Predial, which is calculated based on the property’s assessed value.

There are income tax planning opportunities in Peru, which vary depending on the specific structure and characteristics of each individual and/or family members, as well as the types of assets and jurisdictions involved. Both local and international structures may be used for planning purposes, including trusts, insurance products and investment funds.

It is essential, however, that any tax planning strategy be based on a rigorous assessment of the individual’s or family’s particular situation and objectives. Tax planning must always be carried out within the framework of the law, and not with the purpose of tax avoidance or evasion.

Compliance with legal and regulatory requirements is key to ensuring the sustainability and legitimacy of any planning structure.

In Peru, non-domiciled individuals who sell real estate located in the country are subject to income tax on the capital gain derived from the transaction; the applicable tax rate is 5%. Likewise, rental income (lease income) received by non-domiciled individuals from Peruvian real estate is also taxed at 5%.

Additionally, individuals who purchase real estate in Peru may be subject to the Alcabala tax, which is levied at a rate of 3% on the purchase price, with certain exemptions depending on the circumstances.

Furthermore, all real estate properties in Peru are subject to an annual municipal property tax known as Impuesto Predial, which is calculated based on the property’s official assessed value.

There are planning strategies and structures that may be considered depending on the specific case, including the use of holding vehicles or other investment structures such as local investment funds and trusts. In Peru, two tax-efficient real estate investment vehicles are available: FIRBI (Real Estate Income Investment Fund) and FIBRA (Real Estate Income Securitization Trust). Both are designed to generate regular lease business income and offer potential for capital appreciation. However, each situation must be carefully evaluated in accordance with Peruvian tax regulations.

Peru has maintained relative stability in its tax laws, particularly with respect to the taxation of individuals, estates, and wealth planning structures. Although presidential elections can generate a degree of uncertainty regarding potential tax reforms, no significant changes have been implemented in recent years. The core tax framework applicable to high net worth individuals, trusts and estates has remained consistent.

Peru has taken several steps in recent years to address real or perceived abuses and loopholes in its tax system, in line with international transparency and compliance standards.

Peru is a participating jurisdiction in the Common Reporting Standard (CRS) developed by the OECD and exchanges financial account information with other CRS jurisdictions. Additionally, Peru has entered into an intergovernmental agreement (IGA) with the United States to implement the Foreign Account Tax Compliance Act (FATCA), which facilitates the exchange of information regarding financial accounts held by US persons in Peruvian financial institutions.

Furthermore, Peru has established a registry of ultimate beneficial owners (Registro de Beneficiarios Finales), which requires legal entities and certain arrangements to report their ultimate beneficial owners to the Peruvian tax authority (SUNAT). This registry is not public, but it is available to the Peruvian tax administration for enforcement purposes.

These measures have increased transparency and regulatory scrutiny, which must be carefully considered in any tax or estate planning strategy involving domiciled clients or assets located in Peru.

In recent years, succession planning has become more common in Peru. Peruvian families and individuals are showing greater interest in establishing wealth organisation strategies that entail adequate succession planning, especially considering the various jurisdictions that may serve as tax residence for family members, which means diverse tax implications.

Likewise, there is still resistance among older generations to transfer wealth and control to younger generations. However, there is increasing concern about establishing guidelines for adequate training of these younger generations to ensure effective management of the family assets and/or business.

International planning has had a significant impact on succession planning in recent years. A broader analysis has become part of the firm’s routine advice on these matters, for example:

• the complexity of tax efficient structures for families with beneficiaries located in multiple jurisdictions;
• the application of special tax regimes offered by other jurisdictions;
• succession planning alternatives considering the potential jurisdictions where younger generations might be domiciled;
• protection of assets due to political risks through foreign holding companies located in jurisdictions with strong bilateral investment treaties; and
• the validation of foreign wills for local assets.

The increasing focus on international planning has led the firm to focus on identifying different alternatives and risks, aiming to offer flexible solutions that can adapt to future challenges.

In addition, family protocols ‒ including not only succession planning but also guidelines on corporate governance and equity preservation for family businesses ‒ have become increasingly important. The firm focuses on providing families with clear terms and comprehensive but detailed coverage regarding the operation and scope of the family protocol, avoiding ambiguous provisions or unresolved issues.

Peru has forced heirship laws regulated by the Peruvian Civil Code. Peruvian forced heirship laws are considered imperative rules, ie, such rules are mandatory and cannot be waived by mutual or consensual arrangements.

According to Peruvian Civil Code, a portion of the inheritance is obligatorily reserved for legitimate or forced heirs (herederos forzosos). A forced heir can be the deceased’s children, spouse, parents or siblings (or their direct descendants) with certain rules depending on the case.

If an individual at the time of their death has living forced heirs, their inheritance shall be distributed in favour of such forced heirs, as per the following terms.

• An individual can only dispose of one third of their assets (known as the tercio de libre disposición) in favour of individuals who are not legally recognised as forced heirs.
• The remaining two thirds must be disposed of in favour of their forced heirs in accordance with Peruvian law.
• If an individual does not dispose the one third portion of equity in favour of third parties (non-forced heirs), then the totality of the deceased individual’s equity shall be distributed to the forced heirs in accordance with Peruvian law.
• These rules can only be overridden for specific grounds of disinheritance provided for by Peruvian law.

If an individual has no living forced heirs, they can dispose of the totality of their equity in favour of any person of their choosing.

Forced heirs cannot be excluded through wills or succession agreements (ie, trust agreements), nor can they waive their right to the reserved portion prior to the death of the decedent or testator. They have mandatory rights over the assets of a deceased individual.

The Peruvian Civil Code recognises two patrimonial regimes.

• Community property: all assets and earnings acquired during the marriage by either spouse are considered community property except for “own property (bienes propios), ie, inheritance, assets received via donation, gifts. This regime applies by default. Under this regime, a spouse cannot dispose of community property without the consent of the other.
• Separation of assets: the assets acquired during the marriage, including any income or returns, belong individually to each spouse and are not considered part of a common equity. Each spouse has full autonomy over their property, including property acquired during the marriage and may dispose of it without consent from the other spouse. This regime can be established by a prenuptial or postnuptial agreement, which shall be granted by public deed in order to be legally valid.

In general, the cost basis of property in Peru is determined by the amount paid for its acquisition.

In cases where the property is acquired gratuitously ‒ such as through a donation or inheritance ‒ the cost basis is generally considered to be zero. Alternatively, it may be possible to use the transferor’s original cost basis prior to the transfer, provided that such cost can be duly and reliably substantiated with appropriate documentation.

In Peru, there are legal tools and planning strategies available to help transfer assets to younger generations in a tax-efficient way.

For example, gifts or advancements of inheritance (anticipos de legítima) are not subject to income tax when they are made to individuals. This means that such transfers can be used to pass wealth to the next generation without generating an income tax liability.

However, it is important to understand that even though these transfers are exempt from income tax, they may still be subject to the Alcabala tax, if they involve a real estate property.

The Alcabala tax applies to the transfer of ownership of real estate, even if the transfer is made by way of a gift. However, advancements of inheritance are exempt from the Alcabala tax.

Additionally, trusts established under Peruvian law (fideicomisos) can be used for succession planning purposes. In such cases, the transfer of assets to the trust may be carried out without triggering income tax, provided certain conditions are met.

Digital assets such as email accounts or cryptocurrency are treated like any other asset for succession planning purposes in Peru (there is no specific regulation governing them). These assets are usually included in wills or succession agreements with an appropriate description of the assets. However, the effectiveness of any succession plan for this type of asset will also depend on the internal policies of the entities that control or manage these assets and/or respective providers.

In Peru, locally established trusts are commonly used for tax and estate planning purposes. These include securitisation trusts (fideicomisos de titulización), banking or administrative trusts, insurance structures and investment funds. These vehicles are often used to manage and transfer assets efficiently while offering flexibility and continuity in estate planning.

In addition, foreign structures such as offshore trusts, foundations and life insurance policies governed by foreign law are also used for succession planning, particularly when it involves foreign assets or family members who are tax residents in multiple jurisdictions. These international structures can offer strategic advantages, especially in cross-border estate planning scenarios.

The legal framework allows for the establishment of trusts (fideicomisos) under Peruvian law. These trusts are widely used for various purposes, including estate planning, asset protection, securitisation and investment management.

Peruvian trusts are governed primarily by the Peruvian Finance and Secure Law along with the applicable tax laws. They are considered legally valid vehicles capable of holding and managing assets on behalf of beneficiaries according to the terms set forth in the trust agreement.

From a Peruvian perspective, the tax and regulatory rules do not contain specific provisions regarding trusts established abroad, however, foreign trust are legally recognised in Peru. The tax treatment of such trusts must be analysed based on general tax principles and the facts and circumstances of each case.

Under Peruvian tax law, individuals who are beneficiaries of a foreign revocable or irrevocable trust are not subject to income tax on the distributions they receive, provided such distributions qualify as gratuitous transfers. According to Peruvian Income Tax regulations, gratuitous transfers (ie, liberalities) received by individuals are not considered taxable income.

Additionally, income generated through foreign revocable trusts may be subject to Peruvian CFC rules, provided certain conditions are met. In such cases, the income could be attributed directly to the Peruvian-domiciled settlor for tax purposes.

In contrast, irrevocable and discretionary trusts are generally not subject to the Peruvian CFC rules, as the assets and income are no longer deemed to be under the control or ownership of the settlor.

The mere act of serving as a fiduciary of a foreign trust, foundation or similar structure does not itself trigger specific tax consequences. However, such a role may give rise to reporting obligations, particularly under ultimate beneficial ownership (UBO) rules, which require the disclosure of the structure and its stakeholders to the tax authorities.

Planning opportunities may arise in structuring foreign trusts, taking into account the specific circumstances of each individual and the nature and location of the assets involved, provided that the conditions triggering the application of the Peruvian General Anti-Avoidance Rule (GAAR) are not present.

Since irrevocable fideicomisos do not represent additional tax benefits under Peruvian tax law, their use is not common in Peru.

Regarding irrevocable or discretional foreign trusts, the latter may imply additional tax benefits under Peruvian law. However, any flexibility in control by the settlor or beneficiaries that could alter or challenge the irrevocable and discretionary nature of the foreign trust could impact Peruvian tax benefits.

It is common in this type of structure to grant broader powers to third parties, such as a protector, board of director or investment manager, including the authority to terminate the trust, change the trustee or remove/incorporate beneficiaries.

Set out below are the most popular methods for asset protection planning in Peru.

• Foreign trusts or local fideicomisos: these have become the most popular method, provided they create an autonomous estate separate from the assets of the settlor, the trustee or the beneficiaries. In addition, under Peruvian law, the assets held in a fideicomiso can be unenforceable and unseizable by third parties. Creditors cannot claim the nullity of the assets transferred in trust due to creditor fraud as long as certain formalities are met (ie, appropriate registration in public registries and publication in an official newsletter).
• Incorporation of holding entities in jurisdictions where Peru has strong bilateral investment treaties to protect assets from any political risks (eg, Luxembourg or Spain).
• Separation of assets as patrimonial regime: as is common, this method will protect the assets in case of a divorce or a spouse’s debts and liabilities.
• Donations or advancements of inheritance are often used, particularly when potential tax reforms related to inheritance or wealth tax (especially during presidential elections) are anticipated.
• The registration of a real estate as principal housing (vivienda principal or residencia habitual): in addition to tax benefits, this registration provides protection against third-party claims, including seizures, under specific situations.

Some of the more popular family succession planning structures in Peru include the following.

• Foreign and local trusts, and foundations: in addition to tax benefits, these entities usually provide protection against third parties and also allow for the incorporation of family protocols within their terms. They are often established for an indefinite term in order to ensure perpetuity. Peruvian fideicomisos, if created with a succession planning purpose (fideicomisos vitalicios), can be incorporated for a longer term than other types of Peruvian fideicomisos (ie, until the death of the last living beneficiary at the time of the trust’s incorporation).

• The implementation of family protocols with detailed provisions on succession planning, including the rights and obligations of family members, and their roles in the management of family businesses. Family protocols commonly include terms on corporate governance tailored to satisfy the family’s needs and wishes, ie, director requirements and protocols, regulations for the disposition of family assets, including the right of first refusal and other family members rights in the case of selling family assets, the creation of committees (family board, investment committee, training committee) to ensure compliance with the protocol’s terms.
• Advances of inheritance to forced heirs (anticipo de legitima) and wills.
• Incorporation of foreign entities under the condition of joint tenancy with rights of survivorship in order to ensure the proper transfer of assets. This and all other structures must be analysed on a case-by-case basis.

Gratuitous transfers (gifts and inheritances) in favour of individuals are not subject to income tax, as explained in 2.6 Transfer of Assets: Vehicle and Planning Mechanisms.

However, capital gains derived from transfers made for consideration may be subject to taxation, depending on the source of the income and the tax residency of the transferor.

Specifically, the sale of shares or ownership interests in companies or entities incorporated in Peru qualifies as Peruvian-source income and is subject to Peruvian income tax. In contrast, the transfer of shares or interests in foreign entities is considered foreign-source income and is only taxable in Peru if the transferor is a Peruvian tax resident, as Peruvian residents are taxed on their worldwide income.

However, Peruvian income tax law also establishes that gains derived from an indirect transfer of Peruvian shares qualify as a Peruvian source income when the shares of a non-domiciled company are transferred, and the foreign company owns shares, either directly or indirectly, in a Peruvian entity, subject to certain thresholds and additional requirements stipulated in the law and regulations.

It is also important to note that Peruvian tax law does not allow for valuation discounts based on lack of marketability or lack of control when determining the taxable capital gain. The gain is generally calculated based on the difference between the sale price and the acquisition cost, without adjustments for liquidity or control limitations.

The most common wealth disputes in Peru relate to the following.

• Intestate succession or sucesión intestada: this occurs when a person dies without leaving a valid will. Peruvian law establishes an order of preference to determine the legal heirs and the distribution of the assets. However, this situation usually leads to conflicts between family members (ie, disagreement over shares or distribution of assets). In many cases, judicial proceedings are necessary to resolve the dispute.
• Wills: disputes over wills claiming nullity, incapacity of the testator or defects in the form of the will. Judicial proceedings are used to resolve the dispute.
• Divorce: division of marital property due to divorce. This is commonly resolved by mediation or judicial proceedings.

The Peruvian judicial system provides for the following mechanisms for compensating aggrieved parties in wealth disputes.

• Compensation for damages: this may include consequential damage, loss of earnings and moral damage. Judgments often include costs and procedural costs in favour of the prevailing party.
• In succession disputes, the judge may order the restitution of property or the nullity of acts of disposition.
• In the case of local fideicomisos, if there is mismanagement or default of the trustee, civil liability may be claimed.

These mechanisms for compensating aggrieved parties aim to remedy the harm caused, establish liability, and if possible, restore the victim to the position they would have been in, if the harm had not occurred.

In Peru, the fiduciary or trustee can only be exercised by trust companies duly authorised and monitored by the Peruvian Banking and Finance Authority (SBS) or the Peruvian Regulatory Authority (SMV), as applicable. These entities can be part of the Peruvian financial system or independent entities provided they are duly authorised by the SBS.

Trust companies in Peru are mainly regulated under the Peruvian Banking and Finance Law. As they are entities supervised and monitored by the SBS or the SMV, as applicable, they are subject to strict regulation, including solvency standards and auditing requirements.

The liabilities of a trustee in Peru are regulated under the Peruvian Banking and Finance Law and the respective trust agreement.

In Peru, it is not possible to pierce the veil of a trust or fideicomiso and hold the trustee liable for the liabilities of the trust except in cases of proven fraud or wilful misconduct of the trustee.

Although Peruvian trustees are obliged to act with diligence, loyalty and transparency, it is possible to exonerate or limit their liability through a trust agreement. However, liability arising from fraud or wilful misconduct cannot be waived in any circumstances. It is common to delegate certain powers of the trustee in favour of third-party advisors. Such delegation of powers does not necessarily limit the liability of the trustee: any limitation will apply as long as it is expressly established in the respective trust agreement.

Although the regulation on trusts and trustees in Peru is limited, the trustee is an entity supervised by the SBS and the SMV, as applicable, and is obliged to act at all times in a prudent and transparent manner.

In this regard, the trustee must act in accordance with Peruvian legislation and the terms of the trust agreement, on the understanding that the trust is an autonomous estate, separate from the trustee’s assets, and for this reason the trustee must keep separate accounts and financial statements. Fiduciary investments must comply with the guidelines set out in the agreement, and the trustee will bear no liability provided they act prudently in accordance with the terms of the agreement.

There is no specific standard such as the modern portfolio theory (MPT) in Peru.

The trustee must invest in accordance with the terms of the trust agreement. Although there is no express legal obligation to diversify investments, the trustee is expected to act in a professional and prudent manner at all times, in accordance with the terms of the contract and Peruvian law.

It is quite common for a Peruvian fideicomiso to hold/own the shares of an operating company. While it is not common for the trustee to operate the company whose shares are held in the fideicomiso, there is no legal restriction to prevent this. In such cases, the trustee must manage the operating company as provided for under the respective trust agreement.

Domicile

For tax purposes, an individual will be considered domiciled in Peru under the following conditions.

• Individuals with Peruvian citizenship: they will be considered domiciled in Peru when they habitually reside in the country (ie, the individual will remain in Peruvian territory for a period of more than 183 calendar days within a 12-month period). In this case, tax residency will only be reinstated as of the next taxable year, ie, 1 January of the following year.
• Individuals with foreign citizenship: they will be considered domiciled in Peru when they have resided or remained in the country for more than 183 calendar days within a 12-month period.

On the other hand, individuals, whether Peruvian or foreign citizens, who qualify as Peruvian domiciled, will lose such domiciled status in the following cases.

• When they acquire migratory residence in another country and leave Peru, provided that this is evidenced by a valid visa or a work contract with a minimum duration of one year, duly certified by the Peruvian Consulate or its equivalent. In such cases, the change in tax residency becomes effective from the date on which both conditions are met.
• When they remain absent from Peru for more than 183 calendar days within any 12-month period.

The regulation also states that Peruvian citizens who have lost their residency status will regain it upon returning to the country, unless they do so on a temporary basis, defined as remaining in Peru for 183 days or less within any 12-month period. In such cases, tax residency will only be reinstated as of the next taxable year, ie, 1 January of the following year.

Residency

Migratory residence in Peru can be categorised as follows.

• Temporary residence: individuals with no intention to permanently reside in Peru (ie, tourists).
• Residence for residency purposes: allows an individual to reside in Peru. This can be granted for a fixed term or indefinitely (permanent residency) for various reasons, including work, resident family member, education, humanitarian grounds, retirement, among others.

Citizenship

Peruvian citizenship can be obtained by birth, naturalisation or by option.

• By birth: individuals born in Peruvian territory.
• By naturalisation: foreign individuals who have legally resided in the country for more than two consecutive years (and met other additional conditions)
• By option: individuals born in foreign territory but have at least one Peruvian parents; or foreign spouses of Peruvian citizens who have legally resided in Peru for at least two years.

The means and requirements for an individual to obtain Peruvian citizenship include the following.

• When a foreigner obtains Peruvian nationality by any means, their minor children (if applicable) may automatically acquire Peruvian nationality. The request must be submitted by the naturalised parent before the respective Peruvian governmental authority (RENIEC).
• Children of Peruvian citizens (Peruvian mother, Peruvian father or both) born abroad may apply for Peruvian nationality without the need to reside in Peru. The request may either be submitted directly in the Peruvian consulate in the country of birth (if residing abroad) or before the respective Peruvian governmental entity (if residing in Peru).
• If a foreigner marries a Peruvian citizen, the foreign spouse may apply to obtain Peruvian nationality upon two years of legal residence in the country. It is necessary that the marriage be registered in the corresponding Peruvian public registries.

In Peru, the following special mechanisms are often used to protect the assets of vulnerable people.

• Parental authority (patria potestad): parental authority is automatically granted to the parents of the minor. In the absence of both parents, or under specific circumstances, a judge may assign parental authority to a third party (eg, a guardian or tutor).
1. In the event that a minor is unable to take care of themselves when they reach the age of majority, it is possible to apply for extended or rehabilitated parental authority.
2. When the child or person with a disability receives an inheritance or compensation, the judge may appoint a legal administrator (who may be the same person who has parental authority or a third party). That person must obtain judicial authorisation for the disposition of the assets.
• Local fideicomiso: in order to avoid judicial intervention, it is possible to implement a trust to safeguard assets for the benefit of minors or individuals with disabilities, establishing clear rules on the administration and disposition of such assets in favour of the minor or individual with disabilities. It is possible to appoint a person ‒ distinct from the person who has or potentially has parental authority ‒ to instruct the trustee on the administration of such assets.
• Support designation (designación de apoyo): it has become increasingly common in recent years to designate a support and safeguard person for elderly individuals once they become disabled. When a person becomes disabled, the support person will have the powers established under the designation document to act on behalf of the disabled person. A judicial process is not required if the individual requiring support still has legal capacity.

Under Peruvian law it is possible to appoint a tutor, curator or support person for minors, individuals with disabilities or individuals with other conditions. Strictly speaking, in the case of minors, their parents exercise parentally authority; however, in their absence, a guardian must be appointed.

The appointment of a tutor, curator or support person in Peru requires a judicial proceeding either through an interdiction process or a support and safeguards designation, depending on the type of disability or condition and/or legal capacity of the protected individual. Ongoing judicial supervision is required, and the disposition of certain assets or equity belonging to the protected individual must have the prior approval of the court.

Certain individuals use foreign trust or local fideicomisos to organise their wealth and ensure their protection and quality of life once they age, addressing certain future needs in the best interests of both the settlor and their spouse.

Likewise, it has also become common to appoint a support person to act as a representative in the event of loss of capacity (designación de apoyo y salvaguarda).

Notwithstanding the foregoing, Peru has enacted the Law on the Elderly (Law No 30490), which establishes rights and protection measures to guarantee the exercise of the rights of older persons, including preferential access to healthcare, pensions and justice for elder individuals. The Law also includes measures for the prevention of neglect and violence against the elderly.

In Peru, children born out of wedlock as well as adopted children have the same legal rights as children born within marriage. Legal rights are applicable ‒ including inheritance rights, maintenance and other filiation rights ‒ against natural parents, adoptive parents and relatives. If a parent does not recognise an individual as a son/daughter, but such parental relationship is established by a court ruling, the aforementioned legal rights will apply to the children.

Under Peruvian law, children conceived before the death of a parent are entitled to the same legal rights as a child born after the death of a parent.

Although Peruvian law does not expressly regulate the rights of children by surrogacy, the Peruvian General Health Law establishes that the genetic mother and the surrogate mother must be the same person. Traditionally, surrogate mothers have no genetic link to the child born by surrogacy. This regulation presents a problem in determining the filiation of children born via surrogacy.

Peruvian law does not regulate the rights of posthumously conceived children (children conceived after the death of a biological parent). In principle, they would not have filiation rights against the deceased biological parent. However, such children may still have non-forced heir rights under Peruvian law, provided the deceased biological parent provided as such in a valid written document.

In Peru, the recognition of a child depends on the registration before the competent authority, or by court ruling.

In Peru, same-sex marriage is not recognised. Presently, Peruvian regulation and jurisprudence is quite restrictive on this matter.

Some planning mechanisms used for same-sex couples include the following.

• Local fideicomisos or wills: through which an individual can dispose of their assets in favour of their partner. At the time of executing these documents, it is possible to allocate more than the portion that is not reserved for legitimate heirs (tercio de libre disposición). However, if legitimate heirs exist at the time of the decease of the settlor’s or testator’s death, the will or trust may be challenged for nullity, and the rights of legitimate heirs may be recognised by a judicial decision.
• Co-ownership of assets in favour of the couple: the transfer of assets during lifetime in favour of both partners is also common in order to safeguard their rights over such assets in the event of the death of one partner.

In Peru, de facto unions (union de hecho) between a man and a woman are legally recognised. Provided certain conditions are met (ie, proven cohabitation for more than two years without legal impediments), the de facto union can confer the same rights and benefits as marriage. Under this arrangement, the community property regime applies, and the couple will also acquire the reserved portion rights applicable to forced heirs under Peruvian law.

Peruvian tax law encourages charitable giving by allowing individuals and corporate taxpayers to deduct donations made to government entities and qualified non-profit organisations, provided that the recipient’s purpose involves at least one of the following areas: charity, social assistance, education, culture, science, art, literature, sports, health, or national heritage.

Such donations are deductible for income tax purposes up to a limit of 10% of the donor’s net taxable income. However, in order to qualify for this tax benefit, the recipient organisation must be duly registered with the Peruvian Tax Authority (SUNAT) as an authorised recipient of donations.

Non-profit associations and foundations are most commonly used for charitable planning. Both have legal personalities.

The advantages include:

• foundations that met certain conditions are not subject to income tax;
• other foundations and non-profit associations are income tax exempt if certain conditions are met;
• donations to non-profit associations and foundations can be deducted from the donor’s income tax, representing an incentive for contributions by third parties;
• non-profit associations and foundations can carry out economic activities as long as those activities are aligned with their corporate purpose; and
• foundations offer greater equity protection provided that the assets are separated from the founders’ personal assets.

The disadvantages include:

• neither foundations nor non-profit associations in Peru can distribute their profits among their members or beneficiaries but shall reinvest such profits in their social purposes;
• these entities are usually subject to more rigorous legal and accounting requirements; and
• greater public and government scrutiny compared to other entities.