Tax-Treaty (DTT) Switzerland - Peru
I. Introduction
This article explains how the Double Taxation Treaty between Switzerland and Peru works and why it may be relevant for Swiss citizens, retirees, investors and Swiss Peruvian families who wish to live in Peru.
From a practical perspective, we will analyze how this treaty may affect matters such as tax residency, Swiss pensions, bank accounts, investments, rental income, the sale of real estate and other international income. The purpose is to offer a clear and understandable overview of its main tax effects before transferring one’s center of life from Switzerland to Peru.
Over the last few decades, Switzerland has become one of the main countries of origin for European expatriates, retirees and investors who decide to settle in Latin America.
Peru, for its part, has experienced significant growth as a residence destination for foreigners due to factors such as:
- relatively low cost of living
- favorable climate
- real estate opportunities
- macroeconomic stability
- permanent immigration programs, such as the rentista residence.
However, when a person or family decides to transfer their center of life from Switzerland to Peru, one concern immediately arises:
What will happen with my taxes? Will I have to pay taxes on all my income in Peru?
This concern is especially relevant when there are assets or income sources in the country of origin, such as:
- Swiss pensions from the public or private sector
- real estate properties in Switzerland
- bank accounts
- investments
- dividends
- rental income
- international professional income.
It is precisely to address these types of situations that the Double Taxation Treaty between Switzerland and Peru exists.
II. Historical origin of the DTT between Switzerland and Peru
The Treaty between the Swiss Confederation and the Republic of Peru for the avoidance of double taxation and the prevention of tax evasion was signed by both parties on September 21, 2012, in the city of Lima, Peru.
It was subsequently ratified by both countries and formally entered into force on March 10, 2014. Its provisions generally began to apply as of January 1, 2015.
Therefore, since fiscal year 2015, treaty protection has existed between both States. In other words, the DTT has now been in practical application for 11 years.
III. Why was the treaty signed?
Before the treaty, complex situations could arise.
For example, a Swiss citizen living in Peru could face:
- tax withholdings in Switzerland
- tax obligations in Peru
- difficulties in crediting taxes already paid
- uncertainty as to which country had the right to tax certain income.
The treaty was designed to provide:
Legal certainty: it makes it possible to know in advance which country has the right to tax a specific type of income.
Avoidance of double taxation: it reduces the risk of paying taxes twice on the same income.
Promotion of investment: it facilitates the mobility of people, capital and companies between both countries, with greater legal certainty.
Fiscal cooperation: it allows the exchange of tax information between tax authorities.
IV. Who benefits from the treaty?
The treaty mainly benefits:
Individuals
- Swiss citizens living in Peru
- Peruvian citizens living in Switzerland
- binational families
- people receiving pensions
- investors.
Companies
It also benefits Swiss companies with investments in Peru and, of course, Peruvian companies with operations in Switzerland.
V. The most important concept: tax residency
One of the biggest misconceptions we observe in professional practice is the belief that:
Nationality = tax residency
This is incorrect. Tax residency is a dynamic concept that depends on a real situation: where I actually live and where the main center of my life, work and family is located.
A Swiss citizen may be a Swiss citizen, meaning they hold a Swiss passport, but a Peruvian tax resident because they live in Peru for more than 183 days per year and a Peruvian citizen may be a Peruvian national, but a Swiss tax resident.
VI. What happens when a Swiss citizen moves to Peru?
Let us consider the following case: imagine that Mr. Hans Müller is a Swiss citizen, retired, sells his house in Zurich, obtains permanent residence in Peru and lives in Lima for more than 183 days per year.
Over time, it is very likely that the Peruvian tax authority, SUNAT, will consider him a Peruvian tax resident.
This is where the DTT becomes especially important, because the treaty establishes rules to determine which of the two countries will have tax priority.
VII. The tie breaker mechanism of the DTT
If a person could be considered a tax resident of both countries at the same time, the treaty uses successive criteria:
- Permanent home: Where is their main home?
- Center of vital interests: Where is their family? Where do they carry out their economic life?
- Habitual residence: In which of the two countries do they spend more time?
In fact, nowadays many people who reside in two countries have a clear understanding of their limit of stay in order not to exceed the permitted period and not to fall under the tax jurisdiction of the new country. Conversely, when it is more favorable to be taxed in the new country, they remain there for more than 183 days in order to intentionally become tax residents, since it may be convenient for paying less tax. This, of course, is completely understandable and reasonable.
- Nationality: as the final criterion.
This avoids conflicts between both tax administrations.
VIII. What happens with bank accounts in Switzerland?
This is one of the most frequent topics. Some people may think that having a bank account in Switzerland automatically generates taxes in Peru. That is not necessarily true.
We must distinguish between:
Capital: the money deposited.
Capital income: what that money produces, for example, in a fixed term deposit, mutual funds, stock purchases, cryptocurrencies, etc.
We can illustrate this with a simple example:
If I have the following in a bank account:
CHF 500,000
five hundred thousand Swiss francs
Annual interest: 0%
Result: there is no significant income and, therefore, I do not pay income tax.
In practical terms, there is no relevant financial income to analyze.
On the other hand, if the account generates interest, for example:
CHF 15,000 per year
in interest income
Then there is income that may be subject to analysis under the DTT.
IX. What happens with rental income from real estate in Switzerland?
Here, the treaty is very clear.
There is a universal principle in international taxation: real estate is primarily taxed where it is located.
Example:
An apartment in Geneva generates CHF 40,000 per year in gross rental income. The property is located in Switzerland.
Therefore, Switzerland retains the primary right to tax that income.
Can Peru intervene? Yes, depending on the person’s status as a Peruvian tax resident and on the mechanisms provided by the DTT. However, the treaty prevents full double taxation on the same income.
X. What happens with Swiss pensions?
This is probably the most important topic for retirees.
We must distinguish between:
Public pensions: AVS / AHV.
Private pensions: LPP / second pillar.
Private pension funds.
Practical situation: most Swiss retirees who come to Peru continue to receive their benefits directly from Switzerland.
The DTT seeks to prevent these benefits from being subject to unjustified double taxation.
However, not all pensions receive exactly the same treatment.
Each case must be analyzed individually.
XI. Will pensions be taxed in Peru?
One of the issues that causes the greatest concern among Swiss citizens who wish to settle permanently in Peru is the tax treatment of their pensions. For this reason, we will pay special attention to this topic in this article.
We know that the countries of northern Europe have a very marked cultural concern for thinking about the future. I always attribute this, in part, to their natural sense of order and organization, and also, of course, to the geography and climate of those countries, where the climate can be an adverse situation that forces people to be cautious.
In short, it is about saving for difficult times. If you do not gather firewood, you know in advance that the winter will be very hard and that you will pay dearly for it.
The question is usually asked very directly:
“I have worked all my life in Switzerland and now I wish to retire in Peru. Can SUNAT tax my retirement pension?”
The answer requires first understanding how the Swiss pension system works and then analyzing how it interacts with Peruvian tax residency rules and with the Double Taxation Treaty signed between both countries.
Unlike other pension systems, Switzerland has a particularly sophisticated model based on three pillars, the first two being the most relevant for most expatriates and retirees who decide to move to Peru.
XI.1 AVS (AHV): the Swiss public pension
The AVS, Assurance Vieillesse et Survivants, constitutes the first pillar of the Swiss pension system. It is a public social security benefit financed through mandatory contributions made during active working life.
From a conceptual perspective, the AVS fulfills a function similar to state social security systems that exist in many European and Latin American countries, such as the ONP in Peru.
Its purpose is to guarantee a minimum income during retirement.
From an international legal perspective, the AVS has a predominantly public nature because:
- it arises from Swiss federal law
- t is administered by public institutions
- it forms part of the national social security system.
For many retirees living abroad, the AVS continues to be paid normally outside Switzerland, including in Peru.
XI.2 LPP, second pillar: private occupational pension provision
The second fundamental component of the Swiss pension system is the LPP, Loi sur la Prévoyance Professionnelle.
Unlike the AVS, the LPP is not a public pension.
Its nature is private occupational.
During working life:
- the employer makes contributions
- the employee makes contributions
- the funds are invested
- and an individual pension capital is accumulated.
Later, this capital may be converted into:
- a life annuity
- a combination of annuity and capital
- or, in certain cases, lump sum payments.
In practice, for professionals, business owners and executives, the LPP often represents a much larger portion of retirement income than the AVS itself.
XI.3 Peruvian tax residency and Swiss pensions
When a Swiss citizen settles permanently in Peru, they may eventually acquire the status of Peruvian tax resident.
This normally occurs when the conditions established by Peruvian law regarding permanence and domicile are met.
From that moment on, a legitimate concern arises:
Can Peru tax income that originated in Switzerland?
This is precisely where the importance of the DTT appears, in order to avoid double taxation.
The purpose of the DTT is to prevent the same income from being fully taxed by both countries. It does not necessarily mean an absolute exemption.
It means tax coordination.
In other words:
- it determines which country has the primary taxing power
- it limits cases of double taxation
- and it establishes mechanisms to avoid excessive tax burdens.
XI.4 Practical example of a retired Swiss couple
Let us imagine a couple residing in Lima:
Husband’s AVS: CHF 36,000 per year
Husband’s LPP: CHF 48,000 per year
Wife’s AVS: CHF 24,000 per year
Total annual income: CHF 108,000
When they become Peruvian tax residents, this income becomes part of the family’s international tax analysis. However, thanks to the DTT, Peru and Switzerland must coordinate the application of their respective tax systems in order to avoid economic double taxation on the same income.
Therefore, it is essential to analyze:
- the exact nature of each benefit
- the withholdings made in Switzerland
- the effective tax residence
- and the specific application of the treaty.
XI.5 How much tax is paid in Switzerland on the AVS and the LPP?
There is no single answer. Taxation depends on:
- the canton of origin
- whether the person has tax residency or not
- the payment method
- the type of benefit.
In some cases, there are withholdings at source. In others, taxation shifts to the country of residence. For this reason, each situation requires an individual analysis.
XI.6 Transfers of funds from Switzerland to Peru
One of the most frequent concerns among expatriates is the transfer of assets accumulated over decades. Many clients ask, and this concern is completely normal:
“If I transfer CHF 500,000 from my account in Geneva to an account in Lima, do I have to pay taxes?”
The general answer is that an asset transfer does not, by itself, constitute income. Moving money from one’s own account in Switzerland to one’s own account in Peru does not automatically generate a tax.
However, SUNAT may request an explanation regarding the origin of the money. This is a different issue, related to the prevention of money laundering, which can often trigger alerts for a “suspicious” or unusual transaction.
For this reason, we always suggest informing the bank advisor, known in Peru as a “sectorista”, in advance and sending them the supporting documents digitally before making the wire transfer. This way, if there is an alert from the UIF, the Financial Intelligence Unit of the SBS, the bank will be able to respond easily to the request or alert.
For this purpose, it is important to be able to justify the following with documents:
- the origin of the funds
- the date of acquisition, through the purchase document
- the existence of prior assets, through a registry certificate
- and financial traceability, through financial support documents, transactions, checks, bank statements, transfers, etc.
XI.7 Prevention of contingencies before SUNAT
The best protection for a Swiss Peruvian family is not banking secrecy or the concealment of assets. The best protection is documentation.
It is advisable to keep:
- AVS certificates
- LPP certificates
- historical bank statements
- Swiss tax returns
- property deeds
- sale contracts
- inheritance documents, such as inheritance records or wills, in which case a simple translation can be very helpful
- proof of payment of the corresponding tax on the inheritance received. In Peru, receiving an inheritance is not taxed, but a subsequent sale may be taxed at a rate of 5%
- asset certificates.
All of this makes it possible to clearly demonstrate that the funds transferred to Peru correspond to assets legitimately acquired and accumulated during working life in Switzerland.
XI.8 Conclusion on pensions and pension assets
For most Swiss citizens who decide to retire in Peru, the AVS and the LPP form the core of their financial planning.
The Double Taxation Treaty between Switzerland and Peru provides a fundamental legal framework to avoid situations of double taxation and to offer long term legal certainty.
However, true practical protection does not come only from the treaty, but from proper international tax planning, correct documentation of the origin of the funds and transparent asset management before making the definitive move to Peru.
This section helps to better understand the treatment of Swiss pensions and pension assets within broader international tax planning, especially when a person or family decides to transfer their residence to Peru.
XII. What happens with dividends?
If a person holds investments in Switzerland, such as shares, ETFs or business interests, dividends usually receive specific treatment under the DTT.
Normally, Switzerland retains a limited taxing power through withholding, and the country of tax residence may exercise complementary taxing power under certain rules.
XIII. What happens with remote work?
This topic has become extremely important after the pandemic.
Practical case: a Swiss citizen lives in Peru and works remotely for:
- Swiss companies
- German companies
- companies from the Netherlands.
Where is the income taxed?
The answer depends on multiple factors:
- tax residency
- the place where the work is physically performed
- the existence of a permanent establishment
- the type of contract.
However, generally, the place where the activity is physically carried out becomes highly relevant.
XIV. Sale of properties in Switzerland
Let us suppose:
- a Swiss Peruvian family decides to reside in Lima
- they keep a property in Geneva, Switzerland, in order to receive rental income and live on that passive income in Peru
- and later decide to sell it.
General principle of the DTT
The gain derived from real estate may be taxed in the country where the property is located.
Therefore, Switzerland retains the primary right of taxation, since the property that generates the capital income is physically located in Switzerland, regardless of the owner’s place of residence.
This is one of the most important protections of the treaty.
XV. Practical summary table
| Type of income | Can Switzerland tax it? | Can Peru intervene? | DTT protection |
|---|---|---|---|
| Bank interest | Yes | Yes, depending on tax residency | Avoids double taxation |
| Rental income in Switzerland | Yes, mainly | Limitedly | Very favorable |
| Sale of real estate in Switzerland | Yes, mainly | Limited | Very favorable |
| AVS pension | Possible | Depends on the case | Treaty protection |
| LPP pension | Possible | Depends on the case | Treaty protection |
| Dividends | Yes, with limits | Yes, depending on residency | Tax credit |
| Remote work from Peru | Limited | Generally yes | Requires analysis |
XVI. Real advantages for a Swiss Peruvian family
From a practical perspective, the most important advantages are:
Legal certainty: it makes it possible to know in advance which country may tax certain income.
Lower risk of double taxation: especially on:
- pensions
- investments
- dividends
- real estate.
Asset protection: it makes it easier to keep assets in Switzerland while residing in Peru.
Facilitates international retirement: many Swiss retirees choose Peru precisely because the DTT offers a reasonably clear legal structure.
Better inheritance and asset planning: it allows international assets to be organized with greater predictability.
XVII. Conclusion
For a Swiss citizen or a Swiss Peruvian family that decides to settle permanently in Peru, the DTT is a tool of enormous practical value.
It does not mean that all income is automatically exempt from taxes in Peru.
Nor does it mean that Switzerland completely loses its taxing rights.
What the treaty does is something much more important: it distributes taxing power between both countries in an orderly and predictable way, preventing the same income from bearing an unjustified double tax burden.
For retirees, investors and binational families, this represents one of the greatest legal and economic advantages when planning a definitive move from Switzerland to Peru.
Does the treaty include the possibility of repatriating my personal belongings without paying taxes? No. This is regulated by a different legal framework: the Returned Migrant regime, established by Law No. 30001 and its amendments. Due to its importance, this will be the subject of a new article. In the meantime, here is the SUNAT link where you can read more about this topic:
https://bienvenidoalperu.sunat.gob.pe/es.retorno-al-peru.html
If you would like a personal analysis of your case, which will also include a personalized report, we recommend booking a premium consultation.
Dedicated to my dear Swiss friends Tania and Monika, to the family of Tobias Kormoll, and also to my dear friends in Bern, Elke, René and Aurelie, for their friendship and trust in our work, which allows us to take care of their residences and companies in Lima.
Written in the city of Prague, Czechia, on a day in May 2026.
Frequently asked questions about moving from Switzerland to Peru
Not necessarily. The Double Taxation Treaty between Switzerland and Peru is designed to reduce the risk of being taxed twice on the same income. However, this does not mean that all income becomes tax free. It means that both countries have rules to decide who can tax what.
It depends on the type of pension, your tax residency and how the pension is treated under the treaty. Swiss pensions such as AVS and LPP should be reviewed individually before you move permanently to Peru.
Having money in a Swiss bank account does not automatically create tax in Peru. The important difference is between capital and income. The money itself is capital. Interest, dividends or investment gains may be considered income and may need to be analyzed.
A transfer from your own Swiss bank account to your own Peruvian bank account is usually not income by itself. However, the bank or SUNAT may ask you to prove where the money came from. Good documentation is very important.
Rental income from real estate is generally taxed mainly in the country where the property is located. If the property is in Switzerland, Switzerland usually keeps the primary right to tax that rental income. Peru may still need to be considered if you are a Peruvian tax resident.
Yes. If you sell a property located in Switzerland, Switzerland generally keeps the main right to tax the gain from that sale. The treaty helps avoid full double taxation, but the situation should still be reviewed before the sale.
As a Swiss citizen, you may become a Peruvian tax resident if you spend enough time in Peru and meet the conditions established by Peruvian tax rules. In practice, the 183 day rule is very important. Your Swiss nationality does not automatically determine your tax residency.
Yes, it is highly recommended. If you receive Swiss pensions, own property in Switzerland, have investments or plan to transfer larger amounts of money to Peru, proper planning can help avoid tax problems and unnecessary complications later.
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