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Peru - Income Tax

Income Tax

Taxation of international executives


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All tax information is summarized by KPMG Peru, based on the Peruvian Income Tax Law.

Tax returns and compliance

When are tax returns due? That is, what is the tax return due date?

Tax returns have to be presented between the first three months of the following Peruvian tax year. Due dates are established each year by the Peruvian Tax Administration (SUNAT).

What is the tax year-end?

31 December

What are the compliance requirements for tax returns in Peru?



Resident taxpayers are required to pay income tax on their worldwide income.

Married couples generally file tax returns as separate individuals. However, they can elect to file a joint return.

Income of children is reported on either the tax return of the parent who has the major income, the referred joint return of the parents, or the income tax return of the parent appointed by a judge.


Non-residents are required to pay income tax only on their Peruvian-source income.

Tax rates

What are the current income tax rates for residents and non-residents in Peru?


Tax unit value:


Tax Unit Value

Currency PES*

2009 3,550
2010 3,600
2011 3,600
2012 3,600
2013 3,700
2014 3,800
2015 3,850
2016 3,950
2017 4,050
2018 4,150

PES: Peruvian Sol (same value as prior currency PEN: Peruvian Nuevo Sol)

Income tax table for 2018

Taxable income bracket Total tax on income below bracket Tax rate on income in bracket
From PES To PES    
0 5 tax units 20,750 8
5 tax units 20 tax units 62,250 14
20 tax units 35 tax units 62,250 17
35 tax units 45 tax units 41,500 20
45 tax units  Over


It is applied a flat rate of 30 percent over income.

Residence rules

For the purposes of taxation, how is an individual defined as a resident of Peru?

A resident is defined as someone who has spent 183 days in Peru within any 12-month period. Also, this status is lost after being absent from the country at least 184 days (in total) during the previous year.

A change in the tax treatment applies at the start of the following Peruvian tax year.

Is there, a de minimus number of days rule when it comes to residency start and end date? For example, a taxpayer can’t come back to the host country for more than 10 days after their assignment is over and they repatriate.

No, there is not.

Every day (or parts) of physical stay in the country is taken into account in order to determine the total stay of the individual, including the day of arrival and departure.

The absence period include neither the day of departure nor the day of return to the country.

What if the assignee enters the country before their assignment begins?

Such additional stay will be added to the assignment period and the result will be the total stay of the individual.

Termination of residence

Are there any tax compliance requirements when leaving Peru?

Before leaving Peru, a foreign (resident or non-resident) employee must provide an Income and Withholdings Certificate to the Peruvian tax authorities at the immigration desk. This should show the details of income received, taxed, withheld, and/or paid in Peru.

What if the assignee comes back for a trip after residency has terminated?

Such stay will be taken into account to determine the tax residency status for the following tax year.

Communication between immigration and taxation authorities

Do the immigration authorities in Peru provide information to the local taxation authorities regarding when a person enters or leaves Peru?


Filing requirements

Will an assignee have a filing requirement in the host country after they leave the country and repatriate?

It could be possible, it will depend on the tax status of the employee and the kind of income received during the assignment in the host country.

Economic employer approach

Do the taxation authorities in Peru adopt the economic employer approach to interpreting Article 15 of the OECD treaty? If no, are the taxation authorities in Peru considering the adoption of this interpretation of economic employer in the future?

If an employee is assigned to Peru and gets paid by his/her employer abroad, the host country employer will not be considered an economic employer. It is the liability of the employee to comply with the tax filing and payment.

De minimus number of days

Are there a de minimus number of days before the local taxation authorities will apply the economic employer approach? If yes, what is the de minimus number of days?


Types of taxable compensation

What categories are subject to income tax in general situations?

The following categories of income are subject to income tax:

  • earned income
  • income from self-employment
  • trade or business partnership
  • dividends
  • interest
  • rental income.

Tax-exempt income

Are there any areas of income that are exempt from taxation in Peru? If so, please provide a general definition of these areas.

The following categories of income are exempt from tax.

  • Prizes are exempted from tax unless they relate to rewards related to employment.
  • Maintenance, repairs, fuel, and lubricant expenses for a vehicle, which is the property of the company and is provided for the exclusive use of the executive, necessary for his/her labor.
  • Board and lodging expenses of the expatriate and his/her family, incurred during the first three months of living in Peru. It must be included in the employment contract approved by the Peruvian labor authority that the employer will assume such cost.
  • Airline tickets at the beginning and end of the work contract, as well as airline tickets to the home country for vacations accrued during the term the employment contract is in force. It must be included in the employment contract approved by the Peruvian labor authority that the employer will assume such cost.
  • Traveling expenses to Peru and the cost of bringing luggage and household goods and belongings into Peru, incurred at the beginning of the work contract and traveling expenses out of Peru and the corresponding moving expenses upon the termination of the employment contract. It must be included in the employment contract approved by the Peruvian labor authority that the employer will assume such cost.


Rewards related to employment are taxed. Other kinds of prizes are not.

Maintenance, repairs, fuel, and lubricant expenses for a vehicle

Such expenses covered by the company (employer) are not considered as additional income of the employee provided that they are mainly used for work or business purposes.

Board and lodging expenses

In order to be considered as tax exempt by the tax authority, the assumption of such expenses by the employer must be included in the employment contract agreed with the employee and approved by the Peruvian labor authority.

Airline tickets

Such expenses (home leave, arrival, and return tickets) must also be included in the employment contract agreed with the employee and approved by the Peruvian labor authority.

Traveling expense and cost of bringing luggage and household goods and belongings

Such expenses must also be included in the employment contract agreed with the employee and approved by the Peruvian labor authority.

Expatriate concessions

Are there any concessions made for expatriates in Peru?

Not applicable

Salary earned from working abroad

Is salary earned from working abroad taxed in Peru? If so, how?

Salary earned due to work rendered abroad is deemed foreign source income by the Peruvian income tax law.

Peruvian residents are taxed on their worldwide income, which includes Peruvian-source and foreign-source income. Progressive bracket system applies.

Non-residents are only taxed on their Peruvian-source income. Therefore, non resident’s salary earned abroad is not taxed in Peru.

Taxation of investment income and capital gains

Are investment income and capital gains taxed in Peru? If so, how?

The applicable tax rate for dividends is 5%.

Which is withheld by the company.

Dividends, interest, and rental income

This income is taxed at a 5% tax rate. Gains from stock option exercises

Residency status Taxable at: 
  Grant Vest Exercise
Resident N N Y
Non-resident N N Y
Other (if applicable) N/A N/A N/A

Principal residence gains and losses

Foreign-source losses are not taken into account for Peruvian Income tax purposes.


There is no gift tax.

Additional capital gains tax (CGT) issues and exceptions

Are there additional capital gains tax (CGT) issues in Peru? If so, please discuss?

From the fiscal year 2010 on, the income resulting from sales of stock performed by an individual is applied a tax exemption equivalent to 5 tax units, until 31 December 2011. The portion of the income which exceeds the 5 tax units is subject to income tax, being allowed a deduction of 20 percent over the gross income and a tax rate of 6.25 percent to determine the corresponding income tax due. Capital gains from stock sales will not be considered business income even if the individual performs several stock sales within the fiscal year.

Are there capital gains tax exceptions in Peru? If so, please discuss? 

Pre-CGT assets


Deemed disposal and acquisition


General deductions from income

What are the general deductions from income allowed in Peru?

In the case of self-employment income (fourth category income), a 20% deduction could be applied over the total income, however it must not exceed 24 tax units (this deduction is not applicable for members of a board of directors).

In addition, resident taxpayers may take a fixed deduction of 7 tax units per year against income from employment (fifth category income) or self-employment services (fourth category income).

As from January 1st 2017 employee may deduct 3 additional tax units regarding personal expenses (mortgage interests, rental expenses, professional fees, among others). Professional advice should be sought before deduct actual expenses since various conditions must be met to ensure deductibility and the reimbursement from the Tax Authority.

Tax reimbursement methods

What are the tax reimbursement methods generally used by employers in Peru?

In case the tax withheld by the Peruvian employer exceeded the amount of the income tax due, the employee should request the proper reimbursement to the employer. As those withholdings were already paid to the tax authorities, the employer is allowed to off-set the said reimbursement by choosing one of the following options.

The reimbursement can be off-set with the withholdings performed to other employees. If it is not possible:

  • the reimbursement can be off-set against future withholdings or
  • a reimbursement of the amount reimbursed to the employee can be asked to the tax authority.

Calculation of estimates/prepayments/withholding

When are estimates/prepayments/withholding of tax due in Peru? For example: monthly, annually, both, and so on.

  • Monthly prepayments or payments in advance: the employer must perform monthly withholdings as payments in advance to the annual income tax. Such withholdings should be paid to the tax authority within the first 12 days of the following month, according to a schedule issued by the tax authority (which is based on the last digit of the tax registration number - RUC- of the employer entity).
  • Within the first three months of the following fiscal year, the annual income tax must be determined to confirm that there is no amount due to be paid. If an unpaid amount of income tax were found, it must be paid in the terms established by the tax authority for that fiscal year.

Relief for foreign taxes

Is there any Relief for Foreign Taxes in Peru? For example, a foreign tax credit (FTC) system, double taxation treaties, and so on?

A credit for income tax paid abroad is allowed for tax effectively paid abroad due to income deemed foreign source by the Peruvian income tax law. A formula is applied in order to obtain the tax credit in Peru (taxpayer average rate).

Such credit is only available for tax resident individuals.

There are double taxation treaties in force with Bolivia, Brazil, Canada, Chile, Colombia, and Ecuador.

General tax credits

What are the general tax credits that may be claimed in Peru? Please list below.

  • Payments in advance or prepayments made along the fiscal year.
  • Credit balances of previous fiscal years, recognized or accepted by the tax authority.
  • Income tax paid abroad related to foreign-source incomes also taxed for Peruvian Income Tax purposes, as long as they do not exceed the amount resulting from having applied the taxpayer average rate to the foreign-source income, and the income effectively paid abroad. The taxpayer average rate results from dividing the income tax due with the net income (without the seven tax units’ deduction).

Sample tax calculation

This calculation assumes a married taxpayer resident in Peru with two children whose three-year assignment begins 1 January 2016 and ends 31 December 2018. The taxpayer’s base salary is USD 100,000 and the calculation covers three years.

Salary 100,000 100,000 100,000
Bonus 20,000 20,000 20,000
Cost-of-living allowance 10,000 10,000 10,000
Housing allowance 12,000 12,000 12,000
Company car 6,000 6,000 6,000
Moving expense reimbursement 20,000 0 20,000
Home leave 0 5,000 0
Education allowance 3,000 3,000 3,000
Interest income from non-local sources 6,000 6,000 6,000

Exchange rate used for calculation:
For 2016: USD 1.00 = PEN 3.360
For 2017: USD 1.00 = PEN 3.245
For 2018: USD 1.00 = PES 3.225

Other assumptions

  • All earned income is attributable to local sources.
  • Bonuses are paid at the end of each tax year, and accrue evenly throughout the year.
  • Interest income is not remitted to Peru.
  • The company car is used for business and private purposes and originally cost USD50,000.
  • The employee is deemed resident throughout the assignment.
  • Tax treaties and totalization agreements are ignored for the purpose of this calculation.

Calculation of taxable income

Year ended 2016
Days in Peru during year 365 365 366
Earned income subject to income tax Resident Resident Resident
Salary 336,000 324,500 322,500
Bonus 67,200 64,900 64,500
Cost-of-living allowance 33,600 32,450
Net housing allowance 40,320
Company car 20,160
Moving expense reimbursement 0 64,900
Home leave 16,800 0 0
Education allowance 10,080 9,735
Total earned income 524,160 554,895 486,975
Deductions: 7 tax units 27,650 28,350
Total net income
496,510 526,545 457,925
Other income
(foreign source)
20,160 19,470 19,350
Total taxable income 516,670 546,015 477,275

Tax unit value for 2016: PEN 3,950.
Tax unit value for 2017: PEN 4,050.
Tax unit value for 2018: PEN 4,150.

Calculation of tax liability

  ITR 2016
ITR 2017
ITR 2018
Taxable income as above 222,750 172,800 477,275
Peruvian tax thereon 0 0 0
Domestic tax rebates (dependent spouse rebate) 0 0 0
Foreign tax credits 0 0 0
Total Peruvian tax 129,524



1Certain tax authorities adopt an "economic employer" approach to interpreting Article 15 of the OECD model treaty which deals with the Dependent Services Article. In summary, this means that if an employee is assigned to work for an entity in the host country for a period of less than 183 days in the fiscal year (or, a calendar year of a 12-month period), the employee remains employed by the home country employer but the employee’s salary and costs are recharged to the host entity, then the host country tax authority will treat the host entity as being the "economic employer" and therefore the employer for the purposes of interpreting Article 15. In this case, Article 15 relief would be denied and the employee would be subject to tax in the host country.

2For example, an employee can be physically present in the country for up to 60 days before the tax authorities will apply the ‘economic employer’ approach.

3Sample calculation generated by KPMG, the Peruvian member firm of KPMG International, based on the Peruvian Income Tax Rates Act.

© 2020 Grellaud y Luque, Abogados S.C.R.L., a Peru partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

KPMG International Cooperative (“KPMG International”) is a Swiss entity.  Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.

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