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Taxation in Peru
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Taxation in Peru

Corporate Tax

Main rate: 30%

Resident companies are taxed on their worldwide income, with a credit for foreign tax paid; non-resident companies are taxed on Peruvian-source income only. The place of incorporation determines the place of residence of a legal entity for Peruvian tax purposes. Tax is charged at 30% on total income. Dividends paid between resident companies are not subject to withholding tax, but foreign dividends are included in taxable income.

The temporary net asset tax is in force for fiscal years 2005 and 2006, applied on net assets as of December 31st of the previous year for resident companies. The tax is determined by applying a cumulative progressive scale from 0% (up to approximately $1.48m) to 0.6% (for the excess over $1.48m), and it is payable during the first 12 working days in April or in nine instalments (from April to December). It may be credited against the payments on account of income tax or against the final payment of income tax.

Individual Tax

Progressive rates to 30%

Resident individuals are taxed on their worldwide income; non-residents are taxed on Peruvian-source income only. An individual is resident if domiciled in Peru (domicile being the place of habitual abode). A foreigner is resident if staying in Peru for two years (disregarding absences of less than 90 days). Income tax is charged at progressive rates of 15%, 21% and 30%; non-domiciled individuals pay tax at a flat rate of 30%. Dividends received from resident companies are subject to a final withholding tax of 4.1%.

Capital Gains

Capital gains are generally taxed as income. Capital gains of individuals from the disposal of property are only taxable if they result from habitual transactions, or if they are disposals of certain business property, depreciable personal property, or immovable property constructed with the intention of resale or sold within a development scheme.

Indirect Tax

VAT standard rate: 17% Municipal sales tax: 2%

Value-added tax (including Municipal Sales Tax) applies at 19% to most transactions, and exports are zero-rated. Registration is compulsory for businesses. Exemptions include some basic foodstuffs, urban passenger transport, the international transport of cargo, life assurance policies, some financial products, books, and the construction and maintenance of ships.

Tax Administration & Compliance

Tax year: Corporations: calendar year; Individuals: calendar year

Companies make nine monthly advance income-tax payments based on a percentage of net assets and 12 payments on account based on monthly taxable income. An annual self-assessment tax return must be filed, and final tax paid by the first week in April following the end of the tax year. Tax is deducted at source from wages and salaries. Individuals earning other types of income may be required to make advance payments, depending on the category of income received. Final tax is payable by individuals on submission of an annual self-assessment tax return.

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