Peru - Taxation



Peru Taxation 1898
Photo by: Oleg Mitiukhin

The basic corporate tax rate is 27%. There is a 4.1% tax on the distribution of profits to nonresidents, bringing the effective tax rate for companies making such payments to 30%. The corporate income tax is calculated on the basis of a tax unit (UIT), which is recalculated annually to account for the effects of inflation. Corporate income tax in the Amazon region ranges from only 5% to 10%. Also, a special regime for small businesses and for some low-income companies imposes a monthly income of 2.5%. Dividend payments are not taxed, but capital gains are taxed at 30%. Branches of foreign companies are subject to the same taxes as Peruvian companies.

The personal income tax has two brackets: 15% for taxable income up to 50,000 Soles (about $14,870), and 30% for the increment of income above this amount. Various deductions and allowances reduce the individual's taxable income. 20% of the salary and wages paid by a company to its employees is tax-exempt.

The main consumption tax is Peru's value-added tax (VAT) with a standard rate of 18%, 2% of which goes to the local level as a municipal promotion tax. Exports of goods, services and chattels are exempt for VAT. Luxury goods are subject to excise taxes ranging from 2% to 118%.

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