Peru

Understandd Persons This Convention applies to persons resident in one or both Contracting States.

Taxes Understood 1. This Convention applies to income and property taxes payable by each of the Contracting States, irrespective of the system of their levy. In the case of Spain, “Contracting State” shall include its political subdivisions or local entities. 2. Income and property taxes are those which tax all or any part of the income or property, including taxes on profits arising from the disposal of

movable or immovable property, taxes on the amount of salaries or

wages paid by companies, as well as taxes on capital gains.

3. The current taxes to which this Convention applies are, in particular:

(a) in Peru, the taxes set out in the “Income Tax Act”;

(hereinafter referred to as “Peruvian tax”);

(b) in Spain: (1) the Income Tax of Physical Persons; (ii) the Company Tax;

(iii) Non-Resident Income Tax; and (iv) Property Tax.

NN (hereinafter referred to as “Spanish tax”). Pad

'N

4.

The Convention shall also apply to taxes of an identical or substantially similar nature which are established after the date of signature of the Convention and which are added to or replaced by existing taxes. The competent authorities of the Contracting States shall notify each other of any substantial changes made to their respective tax laws.

CHAPTER 11 DEFINITIONS

General definitions

1. For the purposes of this Convention, unless its context

(a)

(b)

(c)

(d)

(e)

(1

a different interpretation:

the term “Peru”, used in a geographical sense, means the territory of the Republic of Peru, which includes, in addition to the areas within its recognized national territory, the adjacent maritime zones and the airspace within which the Republic of Peru exercises rights

sovereigns and jurisdiction in accordance with their laws and international law;

the term “Spain” means the Kingdom of Spain and, used geographically, includes its land, inland waters and territorial sea, as well as maritime areas outside its territorial sea over which, under the national law of the Kingdom of Spain and in accordance with international law, Spain exercises or may exercise rights of sovereignty or jurisdiction:

the words “one Contracting State” and “the other Contracting State” mean, as required by the context, Peru or Spain;

the term “person” includes natural persons, societies and any other grouping of persons;

the term “corporate” means any legal person or any entity that is considered a legal person for tax purposes;

the terms “undertaking of one Contracting State” and “undertaking of the other Contracting State” mean, respectively, an undertaking operated by

a resident of a Contracting State and an undertaking operated by a resident of the other Contracting State;

(g) “International traffic” means any transport carried out by

a ship or aircraft operated by an undertaking of a Contracting State, except where such transport takes place exclusively between two points situated in the other Contracting State;

(h) the term “competent authority” means:

(1)

(1) in Peru, the Minister of Economy and Finance or his authorised representative;

(ii) in Spain, the Minister of Economy and Finance or his authorised representative;

the term “national” means:

(1) any natural person possessing the nationality of a Contracting State; or

(ii) Any legal person, personalist company or association incorporated in accordance with the laws of a Contracting State.

2. For the application of the Convention by a Contracting State at a time

given, any expression not defined therein shall have, unless its context is in conflict with a different interpretation, the meaning attributed at that time to it by the law of that State concerning the taxes which are the subject of the Convention, and the meaning attributed by the tax legislation over which it would result from other branches of the law of that State shall prevail.

Resident

For the purposes of this Convention, the term “resident of a Contracting State” means any person who, under the law of that State, is subject to taxation in that State by reason of his domicile, residence, seat of address, place of incorporation or any other criterion of a similar nature and also includes the State itself and any political subdivision or local authority. However, this term does not include persons who are subject to taxation in that State solely by the

2.

income derived from sources located in that State, or from the assets situated therein.

Where, under the provisions of paragraph 1, a natural person is resident in both Contracting States, his or her situation shall be resolved as follows:

(a) such person shall be considered a resident only of the State where he or she has permanent housing at his or her disposal; if he or she has permanent housing at his or her disposal in both States, he or she shall be considered a resident only of the State with which he or she has closer personal and economic relations (centre of vital interests);

(b) if the State in which the person has the centre of his or her vital interests cannot be determined, or if he or she does not have permanent housing at his or her disposal in any of the States, he or she shall be considered a resident only of the State in which he or she habitually lives;

(0) if he lives habitually in both States, or does not live in either State, he or she shall be considered resident only of the State of which he or she is a national;

(d) if he was a national of both States or was not a national of either State

the competent authorities of the Contracting States shall decide the case by mutual agreement.

Where under the provisions of paragraph 1 a person other than a natural person is a resident of both Contracting States, he or she shall be considered a resident of the State in which his or her address is located.

Effective.

Permanent Establishment For the purposes of this Convention, the term “permanent establishment” means a fixed place of business through which an enterprise carries out all or part of its activity. The term “permanent establishment” includes, in particular: (a) head offices;

(b) branches; (0) offices;

(d) (e) (1)

factories;

workshops;

mines, oil or gas wells, quarries or any other place in connection with the exploration or exploitation of natural resources.

3. The term “permanent establishment” also includes:

(a)

(b)

a construction, installation or assembly work or project and the supervision activities related thereto but only where such work, construction project, installation, assembly or activity has a duration of more than nine months;

the provision of services by an enterprise, through its employees, but only in the event that such activities continue for the same project in the country for a total period or periods exceeding nine months;

Notwithstanding the provisions of this Article, it is considered that the term “permanent establishment” does not include:

(a)

(a)

(e)

Y)

the use of installations for the sole purpose of storing, displaying or delivering goods or goods belonging to the undertaking;

the maintenance of a warehouse of goods or goods belonging to the undertaking for the sole purpose of storing, displaying or delivering them;

the maintenance of a deposit of goods or goods belonging to the undertaking for the sole purpose of processing by another undertaking;

the maintenance of a fixed place of business for the sole purpose of buying goods or goods, or collecting information, for the undertaking;

the maintenance of a fixed place of business for the sole purpose of advertising, providing information or carrying out scientific research or any other auxiliary or preparatory activity;

the maintenance of a fixed place of business for the sole purpose of performing any combination of the activities referred to in subparagraphs (a) to (€), provided that the whole activity of the fixed place of business resulting from that combination retains its auxiliary or preparatory character.

5.

Notwithstanding paragraphs 1 and 2, where a person, other than an independent agent to whom paragraph 6 applies, acts on behalf of an undertaking and habitually possesses and exercises in a Contracting State powers to conclude contracts on behalf of the undertaking, that undertaking shall be deemed to have a permanent establishment in that State in respect of any of the activities carried out by that person for the undertaking, unless the activities of that person are limited to those referred to in paragraph 4 and if carried out through a fixed place of business, that fixed place of business shall not be regarded as a permanent establishment in accordance with the provisions of that paragraph.

An undertaking is not considered to have a permanent establishment in a Contracting State merely because it carries out its activities in that State through a broker, a general commissioner or any other independent agent, provided that such persons act within the ordinary framework of their activity. However, when that representative carries out all or almost all of his activities on behalf of such an undertaking and between that undertaking and the representative of its activities, conditions are established or imposed that differ from those that would have been established between independent undertakings, that representative shall not be considered as an independent representative within the meaning of this paragraph.

The fact that a company resident of a Contracting State controls or is controlled by a company resident of the other Contracting State, or engages in business activities in that other State (either through a permanent establishment or otherwise), does not in itself make any of these companies permanent establishment of the other State.

CHAPTER 111 IMPOSITION OF REVENUE

Real Estate Income The income a resident of a Contracting State obtains from real estate (including farm or forestry income)

situated in the other Contracting State may be subject to taxation in that other State.

2.

4,

1.

The term “real property” shall have the meaning attributed to it by the law of the Contracting State in which the property is situated. In any event, that term includes property attached to immovable property, livestock and equipment used on agricultural and forestry holdings, rights to which the general law provisions on real estate apply, the use of immovable property and the right to variable or fixed payments for the exploitation or concession of the exploitation of mineral deposits, sources and other natural resources. Ships and aircraft shall not be considered as immovable property.

The provisions of paragraph 1 apply to income derived from direct use, lease or shareholding, as well as any other form of exploitation of immovable property.

The provisions of paragraphs 1 and 3 also apply to income derived from the immovable property of an enterprise and from immovable property used for the provision of independent personal services.

Business profits

The profits of an undertaking in a Contracting State may be taxed only in that State unless the undertaking carries out its business in the other Contracting State through a permanent establishment situated therein. If the undertaking carries out or has carried out its business in such a way, the profits of the undertaking may be taxed in the other State, but only to the extent that they can be attributed to that permanent establishment.

Subject to paragraph 3, where an undertaking of one Contracting State carries out its activity in the other Contracting State through a permanent establishment situated therein, in each Contracting State the profits it would have obtained from being a separate and separate undertaking carrying out the same or similar activities under the same or similar conditions and dealing entirely independently with the undertaking from which it is a permanent establishment shall be attributed to that establishment.

The determination of the benefits of the permanent establishment shall allow the deduction of expenses incurred for the purposes of the permanent establishment, including management and general administrative expenses for the same purposes, whether incurred in the State in which the permanent establishment is located or elsewhere.

4. No benefit shall be attributed to a permanent establishment merely because it buys goods or goods for the undertaking.

5. For the purposes of the preceding paragraphs, the profits attributable to the permanent establishment shall be determined each year by the same method, unless there are valid and sufficient grounds for doing otherwise.

5. Where profits include income regulated separately in other Articles of this Agreement, the provisions of those Articles shall not be affected by those of this Article.

Shipping and air transport

1. The profits of an undertaking of a Contracting State from the operation of ships or aircraft in international traffic may only be taxed in that State.

2 The provisions of paragraph 1 also apply to profits arising from participation in a pool, in a joint venture or in an international operating agency.

Partner Companies 1. When:

(a) an undertaking of a Contracting State participates directly or indirectly in the direction, control or capital of an undertaking of the other Contracting State; or

(b) the same persons participate directly or indirectly in the direction, control or capital of an undertaking of a Contracting State and of an undertaking of the other Contracting State,

and in either case the two undertakings are, in their commercial or financial relations, bound by accepted or imposed conditions which differ from those which would be agreed by independent undertakings, the income which would have been obtained by one of the undertakings in the absence of such conditions, and which in fact have not been realized because of them, may be included in the income of that undertaking and subject to taxation accordingly.

. Where a Contracting State includes in the income of an enterprise of that State

State, and therefore subject to taxation, the income on which an undertaking of the other Contracting State has been taxed in that other State, and the income thus included is income which would have been realized by the undertaking of the State mentioned in the first instance if the terms agreed between the two companies had been those agreed between independent undertakings, that other State shall, if it agrees, adjust the amount of the tax which it has taxed on that income. In determining such adjustment, account shall be taken of the other provisions of this Convention and the competent authorities of the Contracting States shall be consulted where necessary.

Dividends

Dividends paid by a company resident of one Contracting State to a resident of the other Contracting State may be taxed in that other State.

However, such dividends may also be taxed in the Contracting State in which the company paying the dividends resides and in accordance with the law of that State; however, if the beneficial owner of the dividends is a resident of the other Contracting State, the tax thus required may not exceed 5 per cent of the gross amount of the dividends.

This paragraph does not affect the company's taxation of profits from which dividends are paid.

The term “dividends” within the meaning of this Article means the income of shares or other rights, except credit rights, that allow participation in profits, as well as the income of other social participations subject to the same tax regime as the income of shares by the law of the State of which the distribution company is resident.

The provisions of paragraphs 1 and 2 do not apply if the beneficial owner of the dividends, resident of one Contracting State, carries out in the other Contracting State, of which the company that pays the dividends is resident, a business activity through a permanent establishment located there, and the share generated by the dividends is effectively linked to that permanent establishment. In such a case, the provisions of Article 7 apply.

Where a company resident of one Contracting State obtains profits or income from the other Contracting State, that other State may not levy any tax on dividends paid by the company, except to the extent that such dividends are paid to a resident of that other State or the share generated by the dividends is effectively linked to a permanent establishment located in that other State, or subject the undistributed profits of the company to a tax on them, even if the dividends paid or profits not distributed consist, in whole or in part, of profits or income from that other State.

Where a company resident in a Contracting State has a permanent establishment in the other Contracting State, the profits transferred by that permanent establishment to its head office may be subject in the other Contracting State to a tax withheld at the source. However, the tax may not exceed 5% of the amount of profits transferred from the permanent establishment.

Interest

Interest from one Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.

However, such interest may also be taxed in the Contracting State from which it comes and in accordance with the law of that State, but if the beneficial owner is a resident of the other Contracting State, the tax thus required may not exceed 5% of the gross amount of interest.

The term “interest” within the meaning of this article means income from claims of any kind, with or without a mortgage guarantee or benefit-sharing clause of the debtor, and in particular income from public securities and income from bonds or bonds, including premiums and lots attached to such securities, as well as any other income subject to the same regime as income from capital provided by the tax legislation of the State from which the income comes. Penalizations for late payment are not considered interest for the purposes of this article.

The provisions of paragraphs 1, 2 do not apply if the beneficial owner of the interest, resident of one Contracting State, carries out in the other Contracting State, from which the interest derives, a business activity through a permanent establishment located in that other State, and

6.

the credit generated by the interest is effectively linked to that permanent establishment. In such a case, the provisions of

Article 7

Interest is considered to come from a Contracting State where the debtor is a resident of that State. However, where the debtor of interest, whether or not resident of a Contracting State, has in a Contracting State a permanent establishment in respect of which the debt giving rise to the payment of the interest and bearing the burden of the interest has been incurred, the interest shall be deemed to have come from the Contracting State in which the permanent establishment is situated.

Where, on account of the special relations between the debtor and the beneficial owner, or of those between them and third parties, the amount of interest, having regard to the claim for which it is paid, exceeds that agreed by the debtor and the creditor in the absence of such relationships, the provisions of this article shall apply only to the latter amount. In such a case, the excess may be imposed in accordance with the law of each Contracting State, taking into account the other provisions of this Convention.

Royalties

Royalties from one Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.

However, such royalties may also be taxed in the Contracting State from which they come and in accordance with the law of that State, but if the beneficial owner is a resident of the other Contracting State, the tax thus required shall not exceed 15 per cent of the gross amount of the royalties.

The term "gifts" used in this Article means the amounts of any kind paid for the use, or the right to use, of copyrights on literary, artistic or scientific works, including cinematographic films or films, tapes and other means of image and sound reproduction, patents, trademarks, designs or models, plans, formulas or procedures secret or other intangible property, or for the use or right to use, of industrial, commercial or scientific equipment, or for information relating to industrial, commercial or scientific experiences.

4,

3.

The provisions of paragraphs 1 and 2 of this Article do not apply if the beneficial owner of the royalties, resident of a Contracting State, carries out in the Contracting State from which the royalties come an entrepreneurial activity through a permanent establishment located there, or provides independent personal services through a fixed base situated there, and the property or right for which the royalties are paid is effectively linked to that permanent establishment or fixed base. In such a case, the provisions of Article 7 or Article 14, as appropriate, apply.

. Royalties are considered to come from a Contracting State when the

debtor is a resident of that State. However, where the payer of the royalties, whether or not he is a resident of a Contracting State, has in a Contracting State a permanent establishment or a fixed basis bearing the burden of the royalties, they shall be deemed to be from the State where the permanent establishment or fixed base is situated.

Where due to the special relations between the debtor and the beneficial owner, or where both have with third parties, the amount of the royalties, in view of the use, right or information for which they are paid, exceeds that which the debtor and beneficial owner would have agreed in the absence of such relationships, the provisions of this Article shall apply only to the latter amount. In such a case, the excess amount may be imposed in accordance with the law of each Contracting State, taking into account the other provisions of this Convention.

Capital gains

Profits that a resident of a Contracting State obtains from the disposal of immovable property, as defined in Article 6, located in the other Contracting State, may be taxed in the latter State.

Gains arising from the disposal of movable property forming part of the assets of a permanent establishment held by an undertaking of one Contracting State in the other Contracting State, including gains arising from the disposal of that permanent establishment (only or with the enterprise as a whole) may be taxed in that other State.

Profits arising from the disposal of ships or aircraft operated in international traffic or from movable property affected by the operation of such

vessels, or aircraft, may be subject to taxation only in the Contracting State where the alienator resides,

Profits arising from the disposal of any property other than those referred to in paragraphs 1, 2 and 3 may be taxed only in the Contracting State in which the transferor resides.

Independent personal services

Income obtained by a natural person resident of a Contracting State for the provision of professional services and other independent activities of a similar nature may be taxed in that State only, unless that person for the purpose of carrying out such activity has remained one hundred and eighty-three days or more during the relevant calendar year in the other Contracting State. In this case, the income obtained can be taxed in the other Contracting State, but only to the extent that it is attributable to the activity carried out there.

The term "professional services" includes, in particular, independent scientific, literary, artistic, educational or training activities as well as independent activities of doctors, lawyers, engineers, architects, dentists and auditors.

Dependent Personal Services

Without prejudice to Articles 16, 18 and 19, salaries, wages and other remuneration obtained by a resident of a Contracting State on account of employment may be imposed only in that State, unless the employment takes place in the other Contracting State. If the employment is carried out in this way, the remuneration derived therefrom may be subject to taxation in that other State.

Notwithstanding the provisions of paragraph 1, remuneration obtained by a resident of a Contracting State by reason of employment performed in the other Contracting State shall be taxed exclusively in the first State if:

(a) the recipient remains in the other State for a period or periods not exceeding a total of 183 days in

any 12-month period beginning or ending in the tax year concerned; and

(b) remuneration is paid by, or on behalf of, an employer who is not a resident of the other State; and

(c) remuneration is not borne by a permanent establishment held by an employer in the other State.

3. Notwithstanding the preceding provisions of this Article, remuneration

A person who is a resident of a Contracting State on account of employment on board a ship or aircraft operated in international traffic may be subject to taxation only in that State.

Directors’ fees

The fees of directors and other similar remuneration which a resident of a Contracting State obtains as a member of a Board of Directors, a board of directors or a similar body of a company resident of the other Contracting State may be taxed in that other State,

1.

Entertainers and sportspersons

Notwithstanding Articles 14 and 15, any income which a resident of a Contracting State obtains from the exercise of his personal activities in the other Contracting State as an artist of the spectacle, such as theatre, cinema, radio or television, or as a musician, or as an athlete, may be subject to taxation in that other State.

Notwithstanding the provisions of Articles 7, 14 and 15, where the income derived from the personal activities of the performers or sportsmen, in that capacity, is attributed not to the performer himself or to another person, such income may be taxed in the Contracting State in which the activities of the performer or sportsperson are carried out.

The provisions of paragraphs 1 and 2 do not apply to remuneration or benefits derived from activities carried out in a Contracting State if the visit to that State is financed, in whole or in particular, by public funds of the State concerned.

another Contracting State or one of its political subdivisions, local authorities or public entities. In such a case, remuneration or benefits may only be taxed in the Contracting State of which the artist or athlete is resident.

Pensions

Without prejudice to article 19, paragraph 2, pensions and

Similar remuneration paid to a resident of a Contracting State on account of previous employment can only be taxed in that State.

1.

Government service

(a) Salaries, salaries and other similar salaries, excluding pensions, paid by a Contracting State or by one of its political subdivisions or local authorities to a natural person on account of services rendered to that State or to that subdivision or authority, may only be subject to taxation in that State.

(b) Such salaries, salaries and similar remuneration may, however, be subject to taxation in the other Contracting State only if the services are provided in that State and the natural person is a resident of that State who: (1 is a national of that State; or (ii) has not acquired the status of resident of that State solely to provide the services.

(a) Pensions paid by a Contracting State or by one of its political subdivisions or local authorities, either directly or from constituted funds, to a natural person for the purpose of providing services to

that State or such subdivision or entity may be subject to taxation only in that State.

(b) Such pensions may, however, be subject to taxation in the other Contracting State only if the natural person is a resident and a national of that State.

Articles 15, 16, 17 and 18 apply to salaries, salaries and other remuneration paid for services rendered in the context of an enterprise carried out by a Contracting State or by one of its political subdivisions or local authorities,

Students

The amounts received to cover the costs of maintenance, study or practical training by a student or a person in practice who is, or was immediately before arriving in a Contracting State, resident of the other Contracting State and who is in the State mentioned first for the sole purpose of continuing his studies or practical training, may not be subject to taxation in that State provided they come from sources outside that State.

Other income

1. The income of a resident of a Contracting State, whatever its source, not referred to in earlier Articles of this Convention, shall be subject to taxation only in that State.

2. Paragraph 1 does not apply to income, other than that derived from immovable property within the meaning of article 6, paragraph 2, where the beneficiary of such income, resident of a Contracting State, carries out in the other Contracting State a business activity through a permanent establishment situated in that other State and the right for which the income is paid is effectively linked to that permanent establishment. In such a case, the provisions of

Article 7

CHAPTER 1V IMPOSITION OF THE PARTNERSHIP

Heritage 1. Property constituted by immovable property within the meaning of Article 6,

if it has a resident of a Contracting State and is situated in the other Contracting State, it may be subject to taxation in that other State.

A

2. Property consisting of movable property, which is part of the assets of a permanent establishment held by an undertaking of one Contracting State in the other Contracting State, may be taxed in that other State.

3. Assets consisting of ships or aircraft operated in international traffic and movable property affected by the operation of such vessels or aircraft may be subject to taxation only in the Contracting State of which the undertaking operating such vessels or aircraft is resident.

4. All other assets of a resident of a Contracting State may be subject to taxation only in that State.

Chapter V. Methods for elimination of double taxation.

Elimination of double taxation 1. In the case of Peru, double taxation shall be avoided as follows:

(a) Peru will allow its residents to prove against income tax or property tax to be paid in Peru, as credit, the Spanish tax paid for the income taxed or for the property owned in Spain, in accordance with Spanish legislation and the provisions of this Agreement. Under no circumstances may the credit in question exceed the part of Peru's income or property tax attributable to the income or assets that may be taxed in Spain.

When a company that is resident of Spain pays a dividend to A company that is resident of Peru and the same directly or indirectly controls at least 10% of the voting power in the company, the credit must take into account the tax paid in Spain by the company in respect of the profits on which such dividend is paid, but only to the extent that the Peruvian tax exceeds the amount of credit determined without taking into account this subparagraph.

(b) When in accordance with any provision of the present

agreement, the income obtained by a resident of Peru or

assets held by the latter, are exempt from taxation in Peru, EN

Peru may, however, take into account the income or assets exempted for the purpose of calculating the amount of tax on the other income or assets of that resident,

2. For Spain:

Double taxation shall be avoided either in accordance with the provisions imposed by Spanish domestic law or, subject to the limitations of domestic law, in accordance with the following provisions:

(a) Where a resident of Spain obtains income or possesses assets which, in accordance with the provisions of this Agreement, may be taxed in Peru, Spain shall permit:

(1) the deduction from that resident's income tax of an amount equal to the income tax paid in Peru;

(ii) the deduction of the property tax of that resident in an amount equal to the tax paid in Peru on those assets;

(ii) the deduction of corporation tax actually paid by the company which distributes the dividends corresponding to the profits from which the dividends are paid, in accordance with its domestic law.

However, such deduction may not exceed the part of the income tax or property tax, calculated before the deduction, corresponding to the income or assets that may be taxed in Peru.

(b) Where, under any provision of this Agreement, the income obtained by a resident of Spain or the property he holds is tax-exempt in Spain, Spain may, however, take into account the income or wealth exempted in calculating the tax on the rest of the income or property of that resident.

CHAPTER VI SPECIAL PROVISIONS

Non-discrimination

Nationals of one Contracting State shall not be subject in the other Contracting State to any imposition or obligation relating thereto which is not or is more burdensome than those to which nationals of that other State who are under the same conditions, in particular with regard to residence, are or may be subject.

Permanent establishments held by an undertaking of one Contracting State in the other Contracting State shall not be subject to taxation in that State in a less favourable manner than undertakings of that other State carrying out the same activities. This provision may not be interpreted as obliging a Contracting State to grant to residents of the other Contracting State the personal deductions, reliefs and tax reductions it grants to its own residents in view of their marital status or family burdens,

Unless the provisions of Article 9, paragraph 1, of Article 11, paragraph 6, or Article 12, paragraph 6, apply, interest, royalties and other expenses paid by an enterprise of a Contracting State to a resident of the other Contracting State shall be deductible to determine the profits subject to taxation of that enterprise, under the same conditions as if they had been paid to a resident of the State referred to first. Similarly, the debts of an undertaking of a Contracting State contracted with a resident of the other Contracting State shall be deductible for the determination of the assets subject to taxation of that undertaking under the same conditions as if they had been contracted with a resident of the State referred to in the first instance.

Undertakings of a Contracting State whose capital is wholly or partly owned or controlled, directly or indirectly, by one or more residents of the other Contracting State shall not be subject in the State referred to above to any tax or obligation relating thereto which is not or is more burdensome than those to which other similar undertakings of the State referred to in the first instance are or may be subject.

Notwithstanding Article 2, the provisions of this Article apply to all taxes irrespective of their nature or name.

1.

Mutual Agreement Procedure

Where a person considers that the measures taken by one or both Contracting States imply or may entail for him an imposition which is not in conformity with the provisions of this Convention, irrespective of the remedies provided for by the domestic law of those States, he may submit his case to the competent authority of the Contracting State of which he is resident or, if Article 24, paragraph 1, to that of the Contracting State of which he is a national. The case must arise within three years of the first notification of the measure involving an imposition not in accordance with the provisions of the Convention.

The competent authority shall, if it finds the complaint well founded and if it cannot find a satisfactory solution in itself, make every effort to resolve the matter through a procedure of mutual agreement with the competent authority of the other Contracting State in order to avoid an imposition not in conformity with this Convention. The agreement shall apply irrespective of the time limits laid down by the national law of the Contracting States.

The competent authorities of the Contracting States shall endeavour to resolve any difficulties or doubts arising from the interpretation or application of the Convention by means of a mutual agreement procedure. They may also agree to try to avoid double taxation in cases not covered by the Convention.

The competent authorities of the Contracting States may communicate directly in order to reach agreement within the meaning of the preceding paragraphs. The competent authorities of the Contracting States may agree not to resolve a procedure of mutual agreement, in cases where the possible existence of fraud, fault or negligence is appreciated.

Exchange of information

. The competent authorities of the Contracting States shall exchange the

information likely to be relevant to the application of this Convention, or to the administration or application of national law relating to taxes falling within the scope of this Convention

Convention, to the extent that the imposition thus required is not contrary to the Convention. The exchange of information is not limited by Article 1.

2. Information received by a Contracting State pursuant to paragraph 1 shall be kept secret in the same manner as information obtained under the domestic law of that State and shall be communicated only to persons or authorities (including courts and administrative bodies) responsible for the management or collection of taxes of any kind or designation required by the Contracting States, their political subdivisions or local authorities, declaratory or executive procedures relating to such taxes or the resolution of appeals relating thereto. These persons or authorities shall use this information only for these purposes. They may disclose the information at public court hearings or in court judgements.

3. Under no circumstances may the provisions of paragraphs 1 and 2 be interpreted as obliging a Contracting State to:

(a) take administrative measures contrary to its legislation or administrative practice or those of the other Contracting State;

(b) to provide information which cannot be obtained on the basis of its own legislation or in the exercise of its normal administrative practice or that of the other Contracting State; and

(c) provide information revealing business, industrial, commercial or professional secrecy or an industrial process, or information the communication of which is contrary to public policy (ordre public).

4. If a Contracting State requests information pursuant to this Article, the other Contracting State shall use the measures to collect information available to it in order to obtain the information requested, even if that other State may not need such information for its own tax purposes, the preceding obligation is limited by the provisions of paragraph 3 except where such limitations prevent a Contracting State from providing information solely because of the absence of national interest in it.

Members of Diplomatic Missions and Consular Offices The provisions of this Agreement shall not affect the tax privileges enjoyed by members of diplomatic missions or by members of diplomatic missions.

consular representations in accordance with the general rules of international law or under the provisions of special agreements.

Limitation of benefits

1. The benefits provided for in this Convention shall not be accorded to persons who do not have a legitimate cause for their application. It is understood that a person does not have a legitimate cause for applying the benefits of the Convention if:

(a) The specific conditions set out in the Convention are not met.

(b) Residence in one of the Contracting States is not duly established.

(c) If the purpose or one of the main purposes of that person is solely to gain advantage from the Convention.

2. The provisions of this Convention shall not prevent Contracting States from applying the anti-abuse provisions set forth in their domestic law.

CHAPTER VII FINAL PROVISIONS

Entry into force

1. This Convention shall be ratified in each Contracting State and the instruments of ratification shall be exchanged as soon as possible.

2. The Convention shall enter into force three months after the date of receipt of the last notification referred to in paragraph 1 and its provisions shall take effect:

(a) In the case of periodic accrual taxes, in respect of income or property taxes for the year

a tax which begins or ends on or after 30 December of the year of entry into force of the Convention.

(b) In other cases, on the date of entry into force of the Convention.

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Termination

This Convention shall remain in force as long as it is not denounced by one of the Contracting States. Any Contracting State may denounce the Convention by diplomatic means, within five years of its entry into force, by notifying it in writing at least six months before the end of any calendar year. In such a case, the Convention shall cease to have effect:

(a) In the case of periodic accrual tax, in respect of income or property taxes for the fiscal year beginning three months after the date on which the denunciation of the Convention is communicated.

(b) In other cases, three months after the date of notification of the denunciation of the Convention. In faith, the signatories, duly authorized to do so, have signed the

this Convention

Done at Lima, 6 April 2006, in duplicate, in Spanish.

Le.

For the o et ⁇ ul

At the time of signing the Convention between the Republic of Peru and the Kingdom of Spain to Prevent Double Taxation and Tax Avoidance in relation to Income and Property Taxes, the signatories have agreed on the following provisions which form an integral part of the Convention:

L The provisions of this Convention, provided that they maintain the OECD Model Double Taxation Convention approach, shall be interpreted in accordance with the commentaries to the OECD Model Convention.

U With reference to Articles 2, 4, 21, 22, 23, 27 and 28

The provisions relating to property taxes shall apply only to the extent that both Contracting States establish a tax on assets (net assets tax).

III. With reference to Article 4

In order to establish residence in a Contracting State for the purposes of this Convention, a certificate of residence shall be issued stating expressly that the person is resident in the Contracting State for the purposes of the Convention. The competent authority for issuing such certificates shall be:

In the case of Peru, the National Superintendent of the National Superintendency of the Tax Administration - SUNAT - or person to whom he delegates.

In the case of Spain, the Delegate of the State Tax Administration Agency (AEAT) is competent by reason of the territory or person to whom he delegates, or his counterpart or person to whom he delegates in the case of the Provincial Councils of the Basque Country and Navarre. The tax domicile of the person shall determine the territorial competence.

IV, With reference to article 4, paragraph 3

Effective management headquarters is the place where the key business decisions and management decisions necessary to carry out the entity's business or professional activities are made substantially. The place of effective management shall in general be the place where the person or group of persons exercising the managerial functions (e.g. a Board of Directors)

makes its decisions, the place where the lines of action of the entity are determined as a whole.

And. With reference to article 7, paragraph 3

Without prejudice to article 24, paragraph 2, it is understood that the provisions of article 7, paragraph 3, apply only if the expenses can be attributed to the permanent establishment in accordance with the provisions of the tax law of the Contracting State in which the permanent establishment is situated.

VI. With reference to article 12

The tax rate referred to in paragraph 2 of Article 12 during the first five years of the operation of the Convention shall be as follows:

— First year: 30% — Second year: 26% — Third year: 22% — Fourth year: 18% — Fifth year: 15%

VIT. With reference to article 18

The provisions of this article shall not apply if the income earner, being resident in Peru, is not subject to taxation or is exempt in relation to this income in accordance with the laws of Peru. In this case, this income may be subject to taxation in Spain.

HIV- In relation to article 26

The Tax Administrations undertake to exchange all information they may obtain in accordance with their domestic legislation. For the purposes of the exchange of information, control files initiated in a Contracting State shall have the same consideration as those initiated in the requested State.

IX. Nothing in this Convention shall prevent the application of the provisions of Legislative Decrees 662, 757 and 109 and Laws 26221, 27342, 27343, as they are in force at the date of signature of this Agreement and all those amending rules that do not alter its general principle or the optional nature of the signing of legal stability contracts in accordance with the above-mentioned rules. A person who is a party to a contract granting tax stability in accordance with the above-mentioned legal provisions must, not

the fees laid down in this agreement, remain subject to the

taxes stabilized by the contract, for as long as the contract lasts or until the waiver of the contract in accordance with the relevant legislation.

In faith, the signatories, duly authorized to do so, have signed this Protocol.

Made in double copy in Lima, on 6 April 2006 in Spanish idigigma.

For the Republic of Peru