Share with your friends

Peru - Indirect Tax Guide

Peru - Indirect Tax Guide

Explore the requirements and rules that apply to Indirect Taxes in Peru.

Explore the requirements and rules that apply to Indirect Taxes in Peru.

Green island covered by mountains


Types of Indirect taxes

Value Added Tax – VAT

VAT in Peru is a monthly tax generally imposed on:

  • sale of goods within the country
  • rendering or first use of services within the country
  • construction contracts
  • the first sale of real estate made by constructors
  • the importation of goods from outside Peru, regardless of the status of the importer.

For VAT purposes, the taxpayer is any business entity that performs any of the taxable transactions above indicated in the course of business in Peru.

Likewise, permanent establishment of a foreign business is also subject to VAT.

Excise Tax (ISC)

ISC is imposed on the import, manufacture and first acquisition of the following goods:

  • petroleum, gas and derivatives
  • automobiles and other vehicles
  • tobacco and specific beverages
  • luxury products.

What are the standard VAT and ISC rates?

The general rate of VAT is 18 percent (16 percent VAT plus 2 percent Municipal Promotion Tax).

ISC is applied under three systems:

  • specific, which involves a fixed amount in local currency for each unit
  • at the value, a percentage of the sale price
  • the sale price, a percentage of the suggested retail price.

ISC rates vary depending on the goods subject to it and the system applied. Note that since May 2018 the excise tax rate for fuel, cigarettes, beer, liquor and vehicles has increased.

VAT exempted operations

  • Export of goods and services.
  • VAT exempt operations (no input VAT deduction on related costs).
  • The goods and services listed in appendices I and II of the IGV Law are tax exempt until 31 December 2018.

Appendix I

In general, the sale or import of livestock, fresh vegetables, cereals, phosphates, fertilizers, etc.

Appendix II

Public transportation services, cargo transportation, cultural performances, sale of food in popular dining rooms, vessel construction and repairs by foreign enterprises, interest derived of securities issued by individuals or legal entities incorporated or established in Peru, insurance policies issued by insurance companies established in Peru, etc.

The credit services granted by banks, financial and credit institutions were included in this tax exemption list. Since 1 January 2007, they have been considered as not-taxed operations. Therefore, this benefit has turned permanent.

Taxpayers that carry out taxed operations, and not taxed at the same time, may apply the input VAT on a pro-rata basis

Are there any reduced rates, zero rates or exemptions?

For VAT purposes, the general tax rate is 18 percent. The exempt operations are those indicated in the previous section.

VAT exemptions do not give rise to a right of input VAT deduction.

What are the general and specific place of supply rules, if applicable?


The place of supply rule is where the goods are physically located at the moment in which the ownership is transferred to the customer or purchaser.

This rule includes goods that are temporarily outside the country at the moment of sale, or when goods to be imported have already been dispatched for final import into Peru, as well as goods that are registered in Peru for any legal purpose.

Intangibles are deemed to be transferred within the Peruvian territory whenever the parties performing the operation are local residents.

The first transfer of real estate performed by the constructor is subject to VAT only when located within the Peruvian territory.


The place of supply of services is where they are physically performed for the user. This criterion also applies for construction contracts and royalties.

Services provided by non-residents to local persons liable to VAT are taxable when economically used within the Peruvian territory.

VAT registration

Who is required to register for VAT?

There is no special registry in Peru for VAT.

Nevertheless, there is an obligation for all taxpayers to register before the Peruvian tax authority (SUNAT) and to obtain their taxpayer identification number, also known as RUC number in Peru.

The aforementioned registry not only includes VAT taxpayers but all types of taxpayers and/or individuals and entities subject to taxation in Peru.

Is voluntary VAT registration possible for an overseas company?

There is no special registry for VAT purposes in Peru but it would be possible to register a foreign company in the Peruvian tax Registry (RUC). As mentioned above, such a registration involves the identification of the relevant taxpayer with a valid identification number for all tax purposes.

However, such registration will only serve for the purposes of allowing the foreign entity to file VAT returns. The company may then deduct any input VAT paid on goods and services acquired to provide taxable supplies and services within the Peruvian territory.

Does an overseas company need to appoint a fiscal representative?

No, unless it has a permanent establishment.

Is VAT grouping* possible?


VAT compliance

How frequently are VAT and other indirect tax returns submitted?


Can returns be filed and payments be made electronically?


What are the exchange rate rules in your country?

If operations are performed in a foreign currency, they must be converted to PEN by applying the ‘weighted average sale price’ published by the Superintendence of Banking and Insurance (SBS) at the time the tax liability arises.

In the case of imports, operations must be converted into PEN by applying the ‘weighted average sale price’ published by the SBS at the time the tax liability is paid.

VAT recovery

Can an overseas company recover VAT and other indirect taxes if not registered for VAT locally?

N/A as there is no specific VAT registration.

Is it a prerequisite that output tax be charged before input tax can be claimed?

A VAT invoice is necessary to support the usage of the input tax credit.

Are there any exemptions with the right to reduce or deduct input VAT?

The regular way to recover input VAT derived from purchases is to offset it against the output VAT derived from local sales.

If a taxpayer performs VAT exempt and taxed operations, the input VAT related to exempt operations cannot be recovered. Therefore, either a specific identification system or, if it is not possible, a pro rata system should be applied.

The input VAT that cannot be offset should be included in the cost of goods and services.

Exporters (whose exports are zero-rated) are allowed to offset the input VAT against the advance corporate income tax payments, the annual income tax liability or any other central government tax liability.

If this is not possible, taxpayers can request an input VAT refund capped at 18 percent of the shipped exports. The remaining balance that cannot be refunded could be carried forward to the following reporting period and can be subject to a later refund.

Furthermore, input VAT incurred on purchases of 1,000 US dollars (USD) or more is deductible/refundable only if the payment was executed by means of a banking system. Such a Peruvian banking system includes: bank deposits, wire transfers, paying orders, credits, debit cards and non-negotiable cheques.

This specific requirement also implies a 0.05 percent tax imposed on debits and credits (financial transactions tax) applicable for Peruvian bank accounts.

For what period of time may input tax not previously claimed be claimed (i.e. prescription)?

If the amount of input VAT recoverable in a month exceeds the amount of output VAT payable, the excess credit may be carried forward to offset output tax in the following tax period, until such balance runs out.

Where a VAT return reflects a refund due to the taxpayer, is the refund paid to the taxpayer or is the taxpayer required to utilize the refund as a credit against future payments?

As a general rule, the balance of input VAT can only be carried forward – the reimbursement of balance cannot be requested to SUNAT. Exceptionally, exporters can request such refund.


Is a business required to issue tax invoices?


Is it possible/mandatory to issue invoices electronically?

It has been possible since 19 July 2011.

Is it possible to issue recipient-created tax invoices?

Yes. Self-invoicing is known in Peru as “liquidación de compra.”

Such self-invoices are issued by the purchaser when the seller does not have a tax identification number or is an individual selling:

  • farming products
  • small-scale fishing
  • logging
  • wild products
  • small-scale gold mining
  • arts and crafts
  • waste material as well as metal and nonmetallic wastes
  • paper waste and rubber waste.


Do tax audits take place on a regular basis?

Tax audit procedures take place on a discretionary basis. Tax authorities continuously evaluate taxpayer behavior considering different elements such as: penalties, accumulation of input VAT, etc.

Are audits done electronically in your country (e-audit)? If so, what system is in use?

Electronic audits are now regulated. However, they are still not applied regularly due to pending issues to be resolved in their regulations. The duration of such electronic audits is 30 working days, as a maximum.

What penalties can arise from non-compliance?

There is a penalty of approximately USD1,400 for failure to register, late registration or late filings of VAT return. In addition, the VAT credit could be denied in case an invoice is not registered in a purchase register (accounting book) during the following 13 months from the month when invoices are issued. If VAT liability is re-assessed by tax authorities, penalties can include:

  • a tax fine equivalent to 50 percent of the omitted VAT plus 1.2 percent monthly interest. This fine can be reduced up to 95 percent under certain conditions.
  • the omitted (re-assessed VAT) must be paid with a 1.2 percent monthly interest.

Special Indirect tax rules

Are there unique country-specific indirect tax rules that differ from 'standard' indirect tax rules in other jurisdictions?

Exempted exports of goods may include sales made to commercial establishments located in duty-free areas, sales made in these establishments, swap operations made by mining producers, provision of lodging to non-residents, etc.

So far, only a few services could be tax exempt, as they had to be included in a list of export services approved by the Finance and Economic Ministry (MEF) and needed to fulfill certain specific requirements.

Does a reverse-charge mechanism apply?

Yes, based on the ‘services utilization within the country’ rules.

It is applicable to services rendered by non-domiciled providers to resident companies. In this case, the resident recipient of the services is subject to VAT due on the supply. It is entitled to deduct this VAT provided the payment was registered into its purchase book.

In the case of goods, there is no reverse-charge mechanism applicable. Nonetheless, the domiciled goods acquirers are jointly and severally liable to VAT if this is not paid by the non-domiciled seller.

For this reason and because there is no specific collecting mechanism for the non-domiciled seller to pay the VAT, domiciled acquirers may withhold VAT from the price to be paid in order to pay it directly to the tax authorities.

Can VAT on reverse charges be claimed as input tax to the extent that the expense on which the reverse-charge VAT is accounted for is used for taxable purposes?


Can non-residents appoint local agents in order to avoid reverse-charge VAT by virtue of charging standard rate VAT and accounting for such VAT through the agent?

Such scheme is not used in Peru for the use of services in Peru rendered by non-domiciled entities.

Are there indirect tax incentives available (e.g. reduced tax, tax holidays)?

The import of goods into the Amazon region is VAT exempt provided imported goods would be consumed within this region.

The sale of movable goods, supply of services and building contracts within the Amazon region are VAT exempt.

The sale of movable goods within the Amazon region is VAT exempt. Therefore, importers of movable goods to be consumed within this region can request the ‘definitive reimbursement’ of the input VAT paid when acquiring such goods outside the Amazon region.

Additionally, it should be mentioned that there is a system allowing the early recovery of input VAT paid by corporations in a pre-operative stage which have signed an investment agreement with the Peruvian government and provided they are committed to invest at least USD5 million.


Is it possible to apply for formal or informal advance rulings from the tax authority?

The term "ruling" refers to the taxpayer's private consultation to the Tax Administration (SUNAT). With regard to such individual queries, it is possible to make them, however, to date there are few answers given by SUNAT due to the limitations that such entity has to issue them, as well as the procedure required to make them.

Are rulings and decisions issued by the tax authorities publicly available in your country?

Yes, the tax authority’s rulings can be found at Sunat.

Other Indirect taxes

Are there other indirect taxes not commented on above?


Indirect tax contacts

Roberto Casanova-Regis
KPMG in Peru
T +51 1 611 3000 ext. 1135
M +51 1 999 888 666

Daniel Arana
Senior Manager
KPMG in Peru
T +51 1 611-3000 ext. 1613
M +51 1 999 063 196


*By ‘grouping’ we mean: either a consolidation mechanism between taxpayers belonging to the same group (payment and refund are compensated but taxpayers remain distinct) or a fiscal unity for VAT/GST purposes (several taxpayers are regarded as a single taxpayer).

Connect with us