Peru VAT on foreign digital services bill
- Oct 11, 2020 | Richard Asquith
Peru is set to become the latest country to impose VAT on digital or electronic services provided by non-resident businesses. A bill has been presented to the Parliament last month for potential implementation in 2021.
You can review Avalara’s global VAT on digital services tracker here.
Peru is aiming for a withholding VAT model rather than compelling foreign providers to VAT register, charge, collect and remit the VAT. The obligation to hold back the VAT would fall on payment providers – credit card merchants; debit cards; wire transfers; ewallets etc. B2B transactions would be subject to the reverse charge – the recipient would report the VAT through their own VAT return.
VAT in Peru is currently 18%. The services included within the bill are:
- Software support;
- Technical support to a customer’s network;
- Storage of information (data warehousing);
- Implementation of hosting (application hosting);
- Application services supply (application service provider - ASP);
- Storage of website (web hosting);
- Electronic access to consulting services;
- Online auctions;
- Information distribution;
- Access to an interactive website;
- Interactive training; and
- Online sale sites/portals.