Tax rules on wealth imbalance and money laundering investigation: the Peruvian case

Abstract

The objectives of this research are to evaluate the feasibility of using the tax methodology for determining unjustified increases in assets in the investigation of asset imbalances in money laundering cases heard in the courts and to identify the errors made by the Tax Administration, in order to establish whether these represent problems that could hinder the application of the methodology to the investigation of money laundering cases. In order to achieve these objectives, a mixed research was conducted that included the analysis of rulings issued during the years 2020 and 2021 by the Tax Court and sentences issued by the judiciary. This was complemented by semi structured interviews with experts from the public sector, academia and accounting experts with relevant experience on the subject.

The research found that there are some application empiricisms that can be overcome and that do not represent any constraints that cannot be managed. It was also found that the tax methodology allows for a more effective clarification of asset imbalances. The research concludes that, once the implementation errors have been overcome, it is feasible to use the tax methodology to advantage in money laundering investigations.