• Service: Tax, Global Indirect Tax
  • Type: Regulatory update
  • Date: 11/1/2012

Peru: VAT essentials 

Essential information regarding VAT/GST as it applies in Peru.

Scope and Rates

What supplies are liable to VAT?

Peruvian Value-Added Tax (VAT), also known as Impuesto General a las Ventas (IGV), is tax-based on the value-added method. It is applied following the subtraction method on a financial basis of tax against tax.

It applies on:

  • the sale of movable goods within the country
  • the supply of services within the country
  • the utilization of services within the country (when services are provided by non residents in favor of residents)
  • the first sale of real estate performed by its builder or builder corporations.
  • building contracts
  • imports of goods.

What is the standard rate of VAT?

The standard rate of VAT is 16 percent. The Municipal Promotion Tax, also known as Impuesto de Promoción Municipal (IPM) of 2 percent is also added to the value of goods or services used to assess the IGV liability, which results in a 18 percent sales tax overall.

Are there any reduced rates, zero rates, or exemptions?

The goods and services listed in Appendices I and II of the IGV Law are tax-exempt until December 2012. Goods exempt include fresh fish, vegetables, seeds, fruit, educational and cultural books, among others. There are also services exempt from VAT such as public transportation services within the country, cargo transportation, cultural performances, life insurance, and some others.

The credits services granted by banks, financial, and credit institutions were included in this tax-exemption list. Since 1 January 2007, they have been considered as non-taxed operations. Therefore, this benefit has turned permanent.

There is a special regime related to the Amazon region. The sale of goods in that area are tax-exempt as are the services rendered, building contracts, and the first sale of real estate performed by builders.

What are the other local indirect taxes beside VAT?

Selective Consumption tax (excise tax)



Who is required to register for Peruvian VAT?

There is no specific VAT registration in Peru. Nevertheless, there is an obligation for all tax payers to register before Peruvian Tax Authority (SUNAT) to obtain their taxpayer identification number, also known as Registro Único de Contribuyentes (RUC).

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

There is no special registration for VAT purposes in Peru but it would be possible to register a foreign company in the Peruvian’s Taxpayers Registry (Registro Único de Contribuyentes).

Are there penalties for not registering or late registration?

If taxpayers do not follow the registration procedures explained above, there is a penalty of approximately USD 1,400.

Is voluntary VAT registration possible for an overseas company?

There is no special registration for VAT purposes in Peru but it would be possible to register a foreign company in the Peruvian’s Taxpayers Registry (Registro Único de Contribuyentes). As mentioned above, such a registration involves the identification of the relevant taxpayer with a valid identification number for all tax purposes (including invoicing, filing tax returns, and other duties to be accomplished before the tax authority).

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 the acquisition of goods and services required to provide taxable supplies and services within the Peruvian territory and subject to VAT.

Are there any simplifications that could avoid the need for an overseas company to register for VAT?


Does an overseas company need to appoint a fiscal representative?

An overseas company registered before the tax authorities is obliged to appoint a legal and tax representative.


VAT grouping

Is VAT grouping possible?


Can an overseas company be included in a VAT group?




How frequently are VAT returns submitted?

Taxpayers must monthly submit a tax return related to taxable and exempt operations.

Are there any other returns that need to be submitted?

No, there are not.

If a business receives a purchase invoice in foreign currency, which exchange rate should be used for VAT reporting purposes? (e.g. central bank’s exchange rate applicable on the date of the invoice)

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


VAT recovery

Can a business recover VAT if it is not registered?


Does your country apply reciprocity rules for reclaims submitted by non-established businesses?


Are there any items that businesses cannot recover VAT on?

Businesses cannot recover VAT related to operations which are not linked to business activities subject to VAT. Therefore, it is not possible to recover VAT related to exempted transactions.


International Supplies of Goods and Services

How are exports of goods and services treated?

Export of goods and services, and construction contracts performed abroad are not subject to sales tax.

The export of goods includes the sale of movable property made to non residents inside the Peruvian territory, providing that the purchased goods are exported within the legal term. It also recognizes as exportation the transfers agreed under Incoterms conditions (such as EXW and FAS) and the issuance of holding certificates.

Export of goods may also include sales made to commercial establishments located in duty free areas, sales made in these establishments, swap operations made by mining producers, and provision of lodging to non-resident, between others.

The export of services includes a variety of cross-border trade services (services supplied from Peru to another country) established in a list, among others.

VAT paid on purchasing goods and services, construction contracts, and import policies generate the right to a tax credit to be refunded to the exporter in cash or through marketable credit notes.

How are goods dealt with on importation?

When goods are imported into Peru, import VAT and customs’ duties must be paid to customs in order to clear the goods for customs.

How are services which are brought in from abroad treated for VAT purposes?

Services rendered from abroad which are used in Peru by Peruvian VAT payers are taxable.

In such cases, local taxpayer must self-assess the VAT payment in the month immediately after the taxable event is completed, and he/she will compute the VAT credit in the following month.



Is a business required to issue tax invoices?


What do businesses have to show on a tax invoice?

Layout of invoices is strictly regulated. Among others, invoices must contain information about the identity of seller and buyer. In addition, invoices must disclose the price per unit and the VAT charged separately from the sales price.

The invoice must contain the following data:

  • date of issue
  • a sequential invoice number
  • supplier taxpayer identification number (RUC) and customer taxpayer identification number
  • supplier’s name and address
  • customer’s name
  • the quantity and nature of the goods/services supplied
  • unit price (exclusive of any VAT)
  • rate of any discounts (if not included in the unit price and if applicable)
  • the VAT rate applicable The total amount price (including VAT).

Can businesses issue invoices electronically?

It has been possible since 19 July, 2011.

Is it possible to operate self-billing?

Yes. Self invoicing is known in Peru as “Liquidación de Compra”.

Self invoices are issued by the purchaser when the seller doesn’t 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 non-metallic wastes
  • paper waste and rubber waste

Can a business issue VAT invoices denominated in a foreign currency?

Yes, it’s possible.


Transfers of Business

Is there a relief from VAT for the sale of a business as a going concern?

The transfers resulting from business reorganizations (merger or spin-off) and the transfer of personal businesses (businesses owned by single taxpayers who are required to register, invoice, and keep books if their turnover is above the required taxable income for the year) are not subject to VAT.


Options to Tax

Are there any options to tax transactions?

Individuals and estates engaged in business activities and whose gross turnover does not exceed a certain threshold may be subject to a simplified regime that combines income tax and VAT.


Head Office and Branch transactions

How are transactions between head office and branch treated?

There are no special rules for VAT, since both are considered as different taxpayers for VAT purposes.


Bad Debt

Are businesses able to claim relief for bad debts?




Is there a general anti-avoidance provision under VAT law?

There are no specific anti-avoidance rules in VAT legislation. Generally, there are no specific rules with respect to the form a transaction may take, but the underlying economic reason is considered by the tax administration as the main determinant when deciding whether there may be a case of tax avoidance or not. Since July 2012 the tax authority is empowered to consider tax structures as fraud to law.


Penalty Regime

What is the penalty and interest regime like?

There are certain penalties for failing to fulfill formal obligations (late registration, unlawful VAT returns, late submission of a VAT return and other irregularities). In addition, tax authorities may also charge interest of 1.2 percent per month.


Tax authorities

Tax audits

How often do tax audits take place?

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

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


Advance rulings and decisions from the tax authority

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

It is not possible to apply individually for advance rulings from tax authority. Rulings only can be requested through a trade or business chamber or guild. In certain cases, it is possible to arrange meetings with the tax authority to discuss taxpayer’s liability or debt matters, although the tax authority opinions are not necessarily advance rulings.

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

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



In your country, are there unique specific indirect tax rules (regimes) 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, and provision of lodging to non-residents, among others.

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 and needed to fulfill certain specific requirements.

Are there indirect tax incentives available in your country (e.g. reduced rates, tax holidays)?

The import of goods into the Amazon 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 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.

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.


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