Peru extends VAT withdrawal regime on certain construction activities

The Peruvian tax office has confirmed that the VAT Impuesto General a las Ventas (IGV) Withdrawal regime will apply to the following construction activities:

• Install of electricity lines
• Urban constructions work
• Public building work

The Peruvian VAT Withdrawal system is used to control VAT fraud and defaults. It enable the government to take collected VAT from a tax payer’s bank account to offset against other existing tax debts.