Peruvian VAT rates and VAT compliance
Peruvian VAT rates
The standard VAT rate for Peru is 18%, which is made up of 16% VAT plus a municipal tax (Impuesto de Promoción Municipal) of 2%. Exports are subject to a nil VAT rate.
Exempt supplies include: agriculture; education; basic foodstuffs; low-value new residential buildings; financial services; public transport; public post; international freight transport; livestock; gambling; and live events.
Certain supplies are liable to withholding VAT, ‘SPOT’, of 4%, 10% or 12%. These include outsourcing services. Tax payers must split the VAT withheld, and remit it to a special VAT account with the national bank. Balances held on this account may be used to settle future liabilities or reclaimed after three months.
Small businesses may apply for a flat-rate VAT procedure, whereby they are set a fixed about of VAT due based on the size of their monthly turnover.
The current rates are:
|Rate||Type||Which goods or services|
|18%||Standard||18% since March 2011
(16% state VAT + 2% municipal VAT)
Peruvian VAT compliance
There are detailed rules controlling the recording and processing of transactions for VAT. These include guidelines on:
- Invoices must be provided with all taxable supplies
- There is no simplified VAT invoice allowance
- FX amounts on any invoice must be converted at the prevailing SOL rate
- Electronic invoices are required of businesses identified by the General Tax and Customs Administration. These are generally large taxpayers.
- Credit notes may be provided, but must have a unique identification code and refer to the original sales invoice
Invoices must include the following information:
- Name, address and tax number of the supplier
- Name, address and tax number of the customer
- The word invoice “Factura” on the invoice
- Unique VAT number
- The tax number of the invoice printer
- Description of the goods or services
- Date of the invoice
- Amount charged, VAT and total gross value
Time of supply rules
The rules on determining when VAT is due, the time of supply, are as follows:
- When goods are delivered
- Earlier of invoice, payment or provision of supplies, including non-resident provided supplies
- Prepayment when cash is paid
- When goods clear customs for imports
July 18, 2017
Peru abandoned plans to cut its VAT rate from 18% to 17% on 1 July 2017. The country’s fiscal deficit has widened recently, leading...
January 12, 2017
Peru has announced plans to reduce its standard VAT rate by 1% to 17% from 1 July 2017. The measure has already been delayed...
October 27, 2014
Peru this month became the latest South American country to introduce electronic VAT invoices. Ecuador and Mexico also recently introduced such measures. The Tax...