Peru: Business Environment

Company Tax

29.5%

Tax Rate For Foreign Companies

Resident companies are taxed on their worldwide income, non-resident companies only on the Peru-source income.
An entity is considered resident for tax purposes if it is incorporated in Peru or if it has a permanent establishment in the country.
Foreign companies are subject to the same tax regime as Peruvian companies. However, branches are taxed at the corporation tax rate, plus a remittance tax at 5% that applies to deemed profit distributions.

Capital Gains Taxation

Capital gains are generally considered as income and taxed at the ordinary corporate tax rate. If the seller is a non-domiciled party, gains derived from the sale of stock issued by a Peruvian company through the Lima Stock Exchange are taxed at a 5% rate. Such gains are subject to exemption if the stock has a market presence and more than 10% interest is transferred (valid through January 2019 until December 2022).

Main Allowable Deductions and Tax Credits

Payments exceeding PEN 3,500 or USD 1,000 must be made via bank account deposits, wire transfers, payment orders, credit cards, non-negotiable cheques, or other means of payment provided by entities of the Peruvian financial system or else the deductions will be disallowed.
Assets may be depreciated for tax purposes via the straight-line method, at rates between 10% and 25%.
Deductions are available for: interest on loans, insurance premiums, leases of aircraft and ships, maritime freight, and fees for transiting the Panama Canal; depreciation; loss; payment of royalties to non-domiciled affiliates; taxes; start-up and operational costs; wages and salaries; health insurance premiums; vehicle expenses.
Donations to charitable organisations are deductible up to 10% of taxable income. Donations of food apt for human consumption are also deductible, capped at 1.5% of total sales.
Tax losses of Peruvian origin can be carried forward up to four years, unless the taxpayer opts for offsetting the losses against 50% of the net income generated in the following fiscal years after the year in which the loss was generated. However, net losses established in 2020 shall be offset year-to-year in the 5 immediate years, counted from 2021, until their amount is exhausted (COVID-19 related measure). The carryback of losses is not permitted.
From 2020, taxpayers investing in scientific research, technological development, and technological innovation projects can enjoy special deductions between 150% and 215% of the expenses incurred.

Other Corporate Taxes

Employers contribute 9% of salary for healthcare and apply monthly withholdings of 13% or 12.4% for the pension fund, with no other payroll tax in place. Employers should pay an insurance premium for employees who perform high-risk activities.
A property tax is collected by municipal authorities at rates of 0.2%, 0.6% and 1%, depending on the value of the property (deductible from the corporate income tax). Real estate transfer taxes are levied at 3% of the sale price and payable by the buyer. The first 10 tax units (equivalent to PEN 4,600 each in 2022) of the transaction are tax-exempt.
Banking and financial transactions are taxed at a rate of 0.005%. Companies with a total value of assets exceeding PEN 1 million are subject to a temporary net asset tax of 0.4% (the tax applies only to the part exceeding PEN 1 million).
Mining companies are subject to a new royalty regime ranging from 1% to 12%. The special tax on mining varies between 2% and 8.4% while companies having voluntarily concluded a tax stability agreement with the Peruvian government pay in addition a contribution varying between 4% and 13.2% of their mining income. Mining companies are also subject to a contribution surcharge for the activities of the Supervisory Agency for Investment in Energy and Mining (Osinergmin). The tax is collected at a rate of 0.14% of monthly turnover in 2022. Companies are also subject to a contribution tax for the activities of the Agency for Environmental Assessment and Enforcement (0.10% in 2022).
Entities with more than 20 employees, provided they obtain taxable income during the fiscal year, must distribute a percentage of their profits among their employees (10% for fishing, telecommunications and manufacturing  companies; 8% for mining, wholesale, retail and restaurants; and 5% for other activities).

Other Domestic Resources

SUNAT

Consult Doing Business Website, to obtain a summary of the taxes and mandatory contributions.

Tax Rate

Allowable Deductions and Tax Credits

The taxpayers benefit from various deductions according to the nature of their income (salary, pension, etc.). For example, domiciled individuals who receive income from employment or professional income can enjoy a total deduction equivalent to seven tax units from their gross income.
Employees and independent professionals are allowed to deduct three additional tax units for expenses such as mortgage interest, rent paid to a landlord, social security paid for housekeepers, and some expenses paid to independent professional services (conditions apply). Furthermore, employees and independent professionals are allowed to deduct 30% of all expenses paid to independent professional services. 25% of expenses derived from hotels, bars, and restaurants are also deductible (FY 2021 and 2022).
Charitable contributions to entities and dependencies of the government and non-lucrative entities are deductible (up to a limit of 10% of the net taxable income).
Domiciled individuals with income other than remuneration can deduct 20% of rental income and 20% of gross royalties received, with professionals being able to deduct 20% of gross revenues (capped at 24 tax units), plus an annual amount of seven tax units.

Special Expatriate Tax Regime

Domiciled individuals are subject to income tax on their worldwide income, whereas non-domiciled individuals are only taxed on their Peruvian-source income.
Foreign individuals are deemed to be domiciled in Peru for tax purposes if they have resided or been in the country for more than 183 calendar days within a 12-month period.
Non-domiciled employees are taxed at a flat rate of 30% on their gross Peruvian-source income, without any deduction or credit applying.