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Geography and population
Economic development plans
General aspects of foreign trade
External audit requirements
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About Grant Thornton
Grant Thornton Perú, a member firm of Grant Thornton International Ltd (GTIL) offers
tangible solutions to its clients through a wide variety of specific services aimed at optimising
their business’s yield. The firm has a staff of 100 professionals who have the right mix of skills
and experience to help its clients to achieve success promptly and efficiently.
Grant Thornton’s service is based on personalized assistance, commitment to clients, knowledge
of their business and awareness of their needs, hence providing its clients with concrete
solutions implemented with modern technology. In addition to these advantages, resources
provided by GTIL include international-level specialists. Said specialists will give their clients
tangible benefits and a profitable investment for the company’s growth.
Among services provided are accounting and auditing, business and government advisory, tax
compliance and advisory, and business processes outsourcing.
GTIL is one of the world’s leading organisations of independently owned and managed
accounting and consulting firms. These firms provide assurance, tax and specialist advisory
services to privately held businesses and public interest entities. Clients of member and
correspondent firms can access them in more than 100 countries and consistently receive from
its 35,000 personnel a distinctive, high quality and personalised service wherever they choose
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If you require any further information, please do not hesitate to contact your nearest Grant
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This guide has been prepared for the assistance of those interested in doing business in Peru. It
does not cover the subject exhaustively but is intended to answer some of the important, broad
questions that may arise. When specific problems occur in practice, it will often be necessary to
refer to the laws and regulations of Peru and to obtain appropriate accounting and legal advice.
This guide contains only brief notes and includes legislation in force as of July 2013.
Doing Business in Peru 2
Doing Business in Peru
Geography and population
Peru is located in the central - western of South America, bordered to the north by Ecuador and
Colombia, east by Brazil and Bolivia, to the west by the Pacific Ocean and Chile to the south.
The Peruvian coast has a length of 3,080 km and its area is about 1, 285.215 square kilometers.
It is divided into three geographical areas: coast, made up of large deserts and a series of rivers,
the mountains range with high plateaus, deep valleys and surrounded by the snowcapped
peaks of the Andes and the Amazon, made of a large expanse of greenery tropical that has been
Peru has a population of approximately 30 million. Lima, the capital city and its surroundings
have a population of approximately 9 million.
The main cities are Trujillo, Chiclayo, Piura, Arequipa, Cusco and Tacna.
Peru, since 1980, has been governed by democratically elected governments. The city of
Lima is home to the national government. The country is divided into 24 departments and 1
constitutional province, which are grouped into regions, represented by their own regional
Language and religion
The official language is Spanish. However, the business sector, a large number of professionals
and executives speak English.
Most Peruvians are Catholics, being the public exercise of all denominations free, as long as it
does not offend the moral or alter public order.
Currency and exchange control
The Peruvian currency is the Nuevo Sol. There is no exchange control. The exchange rate is set
according to free market rules (supply and demand) although occasionally the price is stabilized
by the Central Bank to prevent its fall.
The current (Agust 2013) exchange rate fluctuates between S /. 2.79 and S/. 2.80 Nuevos Soles
per USD 1.
The time is uniform across the country and coincides with the time of the eastern United States,
with 5 hours behind the Greenwich Mean Time.
In the summer months (January to March), the working hours in Lima for both the public and
private sectors is generally 8:30 am to 5:00 pm with a break for a snack 1 hour.
The staff worker normally starts and ends his day’s work 1 hour before the trainees.
In winter, the Lima office hours begin and end in half an hour, and in some cases, 1 hour later
than the summer, including the public sector.
Banks are open from 9:00 am 6:00 pm; the trade is open from 10:30 am to 9:30 p.m. in all
months of the year.
The other cities of Peru have their own working hours, but the private sector offices are
generally open from 8:00 or 9:00 am until 5:00 or 6:00 p.m. Not normally attend on Saturdays.
Peru´s public holidays are:
New Year January 1st
Maundy Thursday March/April (not fixed dates)
Good Friday March/April (not fixed dates)
Labor Day May 1st
Peter and Paul June 29th
Independence Day July 28th - 29th
Santa Rosa de Lima August 30th
Combate de Angamos October 8th
All Saints Day November 1st
Immaculate Conception December 8th
Christmas December 25th
In an international context, the standard of living and cost of living for Peruvian workers are
comparatively low, as well as their profits.
Cultural and social life
Social and cultural activities including concerts, films, fairs, exhibitions, bullfights, trips to the
beaches outside of Lima and the interior, among other activities.
Doing Business in Peru 4
Economic development plans
The main government objective is to strengthen economic and trade outlook, based on tax
collection and the participation of foreign investment through privatization initiatives.
In that sense, the most striking features is the policy of privatization of state enterprises,
reintegration into the international financial system, the elimination of state monopolies and
reforming public administration and the tax system, among others.
Natural resources is the biggest economic sector, nevertheless, there is still much to be exploited.
Its main resources are:
• oil and gas: Peru’s international position regarding the production of oil has been
unfavorable due to the lack of development in the past. For gas, there are large reserves that
are beginning to be exploited
• mining: Peru is the first largest silver producer in the world, the seventh in copper and in
• agriculture: the main products are currently exported are asparagus, broccoli, mangoes and
The most attractive industries in Peru are those related to the transformation of the country’s
natural resources, such as textiles, canned fish, gold and silver jewelry, refined minerals, etc.
In sectors such as chemical and pharmaceutical, food and beverages, among others, are also
important industrial companies.
Also, banking and insurance sectors are modern and capable of any future growth in the market.
Doing Business in Peru 5
In Peru, the legal framework for both domestic and foreign investors has a similar treatment.
In that sense, it is possible that all shares of a company are owned by foreigners, except restrictions
under sectoral rules.
There are investment opportunities through participation of public enterprises, the granting of
concessions for the realization of infrastructure projects and public services, in addition to the
traditional activities of mining and export of textiles.
Foreign investment does not require prior approval by the central government, except for banking
and finance. Foreign investment is approved automatically upon registration in the respective
Economic and fiscal policy
The development of commercial activities is not restricted by any taxes, and prices are subject to
supply and demand.
Fiscal policy aims to develop an efficient tax system, in order to establish adequate tax letter and
increase the tax base.
Repatriation of capital and profits
In Peru there are not restrictions on the repatriation of capital.
Forms of foreign investment
The law recognizes as forms of investment: capital contributions which are made to new or
existing companies, investments in national currency resulting from legally remitted resources,
capitalization of private foreign obligations, reinvestment of profits, intangible technological
contributions, capital expenditures, investments from joint venture contracts or any type of
investment that contributes to development.
There are investment opportunities through participation of public enterprises, the granting
of concessions for the realization of infrastructure projects and public services, as well as the
traditional activities of mining and export of textiles.
Doing Business in Peru 6
As the investor has registered with the respective government entity, is empowered to transfer
abroad the proceeds of the sale of shares or rights in the capital or its reduction, as well as dividends,
royalties, interest, among others, prior for payment of taxes, if applicable.
Also, foreign investors will also have access to favorable exchange rates for remittances.
Foreign investors may enter into legal stability agreements with the State, which will guarantee for a
period of 10 years, among other things:
• stability of the Income Tax effect at the signing of the agreement, which includes the current rate
• stability of freely available foreign currency and the right to transfer of capital, dividends,
royalties and profits abroad
• stability of the right to non discrimination against domestic investors.
The current tax treatment at the time of the investment can be stabilized through signed legal
stability agreements with the state.
Doing Business in Peru 7
Overview of trade
• the government guarantees the free movement of good
• the government, in some cases, exempts customs tariffs on certain products
• available regimes temporary import of goods with suspension of the collection of customs
duties and taxes under certain conditions
• there are limited restrictions on imports.
Imports and exports
The State guarantees freedom of trade. Imported goods are subject to payment of customs
duties, the Value Addes Tax and, in some cases, the Excise Tax. Customs duties on imports are
applied on CIF and exports are not burdened with taxes. Peru is a member of the WTO, the
Andean Community and LAIA
In general, there are no significant restrictions on the import and export of goods, but there are
some exceptions provided by law.
So, is restricted the importation of arms and ammunition, communications equipment,
specialized products and byproducts of plant and animal agricultural pesticides and the like,
ammonium nitrate, nuclear material, among others.
Goods are classified under the nomenclature NANDINA and duties are applicable on the CIF
value of imported goods, with variable rates ranging from 4%, 7%, 12% and 20%, and even
some items have been expanded with tariff rates of 0%.
It has also established additional customs duty applicable to certain products equivalent to 5%
ad valorem CIF.
Check the price of goods
According to the provisions of the Customs Valuation Agreement of WTO, the check is
intended to determine the correct basis for customs clearance required by the intervention of a
supervisory body authorized. The verification should be mandatory depending on the type of
property and the FOB value of the same.
There are bonded warehouses for the temporary placement of goods. These stores are
responsible for damage and loss of goods entered the premises at your expense.
The customs agent may be a natural or legal person duly authorized to serve others, as usual
manager in all kinds of customs procedures. Also, before the customs procedures can be
performed by the importer, consignee or owner of the goods or the customs agent.
Doing Business in Peru 8
To conduct business in Peru, foreign investors usually choose the corporate form of the
corporation or opt for the establishment of branches.
Branches are taxed as a corporation, except with respect to their income from foreign sources,
which are not taxable in Peru.
There is no minimum percentage of equity on the part of persons or peruvian entities, there are no
provisions requiring that the positions are filled by residents of Peru or peruvian.
There are the following types of companies:
Sociedad Anónima (S.A.)
Corporate form more common, it is sustained other variants of the same: the public company and
closed corporation. Contributions to the capital represented by shares. Liability is limited to the
value of the contribution.
Sociedad Anónima Cerrada (S.A.C.)
When society has no more than 20 partners and has no shares listed on the Public Registry of
Securities and Markets. The transfer of shares is limited.
Sociedad Anónima Abierta (S.A.A.)
When you meet one or more of the following conditions:
• has made public offering of shares or convertible bonds;
• has more than 750 shareholders;
• when more than 35% of its capital belongs to 175 or more shareholders
• when all the voting shareholders unanimously approved the adjustment to the scheme
• the S.A.A. must register its shares in the Public Registry of Securities and Markets, and
therefore is subject to supervision by government entities
Sociedad Comercial de Responsabilidad Limitada (S.R.L.)
Similar to the corporation, where all partners have limited liability. Its capital is divided into shares
for which no documents of title are issued.
Sociedad Colectiva (S.C.)
Society in which the partners are liable jointly and severally and unlimited.
Doing Business in Peru 9
Sociedad en Comandita
The limited partnership can be simple or shares:
• simple (S. en C.).- Some partners have unlimited liability (collective) and other partners have
limited liability to the value of their contributions (limited partners).
• by shares (S. en C. por A).- Like S. in C., the general partners have unlimited liability and
limited partners have limited liability to the value of their contributions, but in this case the
entire capital is divided into shares, belong to the general partners or limited partners.
Societies, whatever form they have taken should be recorded in public records.
Individual Limited Liability Company (EIRL)
The EIRL is a form of business organization that is an entirely different legal entity from
its owner, who must necessarily be a natural person. The holder’s liability is limited to their
contribution, and must also enroll in public records.
This form of organization is governed by special legislation.
Societies, whatever form they have taken, and the EIRL, must be registered in public records.
Secondary establishment of a local or foreign company outside the scope of his home, where
they conduct certain activities within its corporate purpose. It has no legal status or legal
independence. However, for tax purposes, it is independent from its parent establishment.
Branches in foreign companies
The law defines the branch as all secondary establishment through which a society develops in a
place other than their home certain activities within its corporate purpose.
To register a branch of a foreign company, the legal representative of the company in Peru must
provide the public deed before a public notary.
The documentation must be attached to the deed as follows:
• copy of Articles of Incorporation of the main articles of association or equivalent
instruments in the country of origin
• copy of Agreement establishing the branch taken by the competent body of the parent
company. The agreement must specify:
– amount of capital allocated to their activities
– statement that such activities are within its corporate purpose
– the domicile of the branch
– name of the person or persons designated as representatives in the country and the
powers granted and their subjection to the laws of Peru to meet the obligations of the
branch in the country.
• certificate of Good Standing from mainstream society in their country of origin, stating
further that its articles of incorporation or its statute does not prevent the establishment of
Doing Business in Peru 10
The documents listed should be legalized or apostilled by the Peruvian Consul of the place.
In addition, the signing of Peruvian Consul should be authenticated by the Ministry of Foreign
Affairs. Any foreign language document must be translated by an official translator in Peru.
The business of the branch is headed by the legal representative be duly recorded.
The scopes of the representative’s powers vary according to the policy of each parent, but must
be large enough to allow adequate representation in Peru.
It is recommended to allow delegation of certain powers such as signing checks. There is no
regulation that requires the parent company financial statements to record in Peru.
Joint Venture or Consortium
Each member of the Consortium is linked individually with third parties in carrying out the
activities it deserves and is accountable to them individually. The contract should establish a
system of profit sharing Consortium, otherwise shall be deemed to equal parts.
For tax purposes are considered independent when they have independent accounts.
Overall, government oversight of companies is limited to the following:
• review of books and records that relate taxation by the corresponding government entity
• supervision of banking, finance and insurance, as well as review of financial statements of
companies under the supervision of state entities with separate legal personality
• supervision and inspection of facilities where chemicals are produced
• supervision and inspection work in the workplace.
Distribution of dividends
The distribution of profits by companies must be by agreement of the shareholders or members.
For the distribution of profits shall observe the following rules:
• dividends can be paid only on the basis of gained profits or free reserves, provided that the
net worth not less than the paid-in capital.
• all shares of the company, even if they are not fully paid, have the same right to the dividend,
regardless of the opportunity they have been issued or paid, unless otherwise provided in the
Annual General Meeting (AGM).
• applies the distribution of interim dividends, except those companies for which there is
express statutory prohibition.
• if it declares dividends on account, without the favorable opinion of the board, joint and
several liability for payment rests exclusively with the shareholders who voted for the
• the delegation is valid in the directory of the power to approve the distribution of dividends.
Doing Business in Peru 11
Dissolution and liquidation
The solution should be agreed at the AGM)or Board of Partners and be published in the
national official journal for three consecutive times, within ten days of the agreement adopted.
It should also be applied for registration in the Public Registry within ten days made the last
The clearance procedure is in charge of the liquidators appointed by the shareholders. They will
be responsible for the realization of the assets of the company and must pay the corresponding
duties and then distribute to shareholders equity resulting from the bottom.
Doing Business in Peru 12
Employment contracts can take either written or verbal form. Employment contracts are
subject to special conditions stated in writing and must necessarily be made known to the labor
Once started the employment relationship, workers play a trial period of three months, during
which they can be fired without being entitled to compensation for unfair dismissal.
This period may be extended to 6 months or 1 year in case of skilled workers, management or
trust. It should be noted that there are additional rights for women and child workers.
The job placement is allowed when it involves staff providing services in the workplace or
business operations, provided that there is a seasonality assumption, complementarily or
Staff seconded to a client company cannot provide services involving the continued
implementation of the main business of the company.
Also, this service can only be performed by companies incorporated as legal entities or
cooperatives whose sole purpose is the provision of intermediation services.
Registration of employers and their workers
All employees are required to register with the Ministry of Labor, Health System (EsSalud)
Pension Scheme (whether public or private) as well as to the National Superintendence of Tax
Requirements for payrolls
The following rules are mandatory for employers:
• employers must maintain control of their payrolls electronically, which should record the
payment of workers’ wages and other labor concepts
The spreadsheet should contain the following information:
• full details of each worker (name, sex, birth date, ID, date of entry or reentry into the
company) office or occupation, educational level, the registration number of insured pension
systems corresponding pay, number of days and hours worked, overtime, deductions for
contributions and tax payments, among other
• the start date, end date and the date they begin and end each worker’s annual vacation.
• employees must sign the payment voucher delivered them as proof of payment contained in
the spreadsheet. These payslips should contain the main items that are contained in the Book
of lists and kept by the employer for a period of 5 years
• by 2007 and 2010 in some cases, employers were required to bring the book returns in
physical form, in single sheets or microfilmas, which must also be preserved for a period of 5
Doing Business in Peru 13
Doing Business in Peru 14
• before, employers could provide authorization to hold books or records of payroll by
workplace location, hierarchical level employees, among others considered, however now
will be consolidated into the spreadsheet.
• employers of domestic workers are not required to have book of lists, either physically or
• sheets for construction workers and others are governed by special rules.
Employee participation in the profits of the company
In Peru is contemplated regime worker participation in company profits.
Participate in profit workers in companies that develop income-generating activities of third
category provided that they are subject to the labor of the private sector and that have more
than 20 workers.
The workers included in this part of the labor system of the company profits through the
distribution, by the latter, a percentage of their annual income before taxes. This percentage
varies according to the activity of the company.
The maximum contribution each employee can receive is the equivalent of 18 monthly salaries
in effect at year end.
The normal working day is 8 hours per day or 48 hours per week maximum, with some
additional limitations with regard to minors. They are subject to these limitations, managers,
administrators and other executive staff members.
The average hours worked in the corresponding period cannot exceed 8 hours per day or 48
hours per week on average. You can only exceed 48 hours per week on a voluntary basis and
with the corresponding compensation.
Termination of employment
According to labor law, the grounds for terminating the employment relationship are:
• death of the worker or the employer, if this is an individual
• voluntary resignation or retirement of the worker
• completion of the work or service, the fulfillment of conditions precedent and the expiration
of contracts legally entered into under mode
• dismissal. In this case, the causes for dismissal are related to functional ability or misconduct
of the worker
• termination of employment for objective reasons in the cases and manner permitted by law.
The employer may not dismiss on grounds relating to the conduct or capacity of the worker,
before the grant deadline for written employee can rebut the charges made.
If the dismissal is arbitrary, indefinite-term contract worker is entitled to compensation
equivalent to one and a half pay for each completed year of service with a maximum of 12
Compensation for time of service (CTS)
Employees are entitled to compensation for time served, free of taxes. This compensation is
awarded on the basis of a monthly pay 1 / 6 of the same for each year of service.
The right to compensation earned after the first month of service. For this purpose it is
understood that compensation is computable the full what the worker receives for his services,
either in cash or in kind, in whatever form or name that is given, provided they are freely
However, the law provides some remunerative concepts not account for the CTS, such as special
bonuses, Christmas basket, among others.
Social Health Insurance (EsSalud)
The health delivery system in the country is run by EsSalud. The fee for this contribution is 9%
Social security legislation covers all workers enrolled dependents on the return. The
employment relationship is the only condition that determines the worker’s compulsory,
regardless of duration or time of work, day, week or month.
Payment of contributions must be made by the worker, all workers, whether foreigners or
Peruvians who are registered on the form.
The basis for calculating the contribution to EsSalud monthly total compensation is regularly
received by the worker in any form, including payments in kind.
For purposes of this contribution, there are some elements of remuneration are excluded, such
as profit sharing, bonuses, overtime is not regular.
The workers, employees and workers are entitled to benefits EsSalud comprising mainly
benefits of prevention, promotion, recovery and subsidies for health care and social welfare, and
Social health insurance is run by EsSalud and can be complemented with alternative plans and
programs provided by Health Benefits Entities (EPS) duly accredited by the benefits fund
contributions and other payments to him according to law.
National Pension System (NPS)
The NPS is administered by the Office (ONP) and covers the pensions of employees and retired
workers, provided they have contributed a minimum contribution of 20 years. The employee
discount for this item is 13%.
The amount of pension is determined by the remuneration received by the worker and the
number of contributions paid by the system.
Private Pension System (PPS)
The Administration of Pension Funds (AFP) manages a pension alternative. Through this
system, AFP guaranteed retirement pensions, invalidity and survivors’ pensions and funeral
Doing Business in Peru 15
The contributions are an individual capitalization fund. Pensions are financed exclusively by the
workers through their contributions, to accumulate their respective interests.
To this end, workers must contribute 10% of your monthly salary plus commissions insurable
for the AFP and insurance premiums to cover disability, survivors and funeral, making a total of
Working Supplemental Security Risk (SCTR)
The SCTR is designed to provide coverage to members play regular high-risk activities.
This insurance is mandatory and is assumed by the employer and covers the risks of health
benefits, pensions for temporary or permanent disability and survivors and funeral expenses
resulting from accidents or illnesses.
Foreign personnel must enter into a contract of employment which must be approved by the
The employment contracts with foreigners are given time and for a period not exceeding 3
years, renewable for like periods successively.
It is also necessary after the conclusion of employment contract, a visa abroad at work or
residence visa, for which the employer must obtain a letter of guarantee to the immigration
The duration of the visa can be renewed annually and during the period in which the
employment contract is in effect. After obtaining the visa, the employment contract shall take
The tourist visa is granted for a period of three to six months and may be extended under certain
circumstances up to 90 additional days.
It is possible to hire foreign workers to the limit of 20% of all workers on the payroll and
registered for an amount equal to 30% of the total remuneration paid. Are not considered in the
limitations mentioned, among others, the following:
• foreigners married to people of Peruvian nationality
• foreigners who have children born in Peru
• immigrant visa foreigners
• foreigners whose country of origin has a reciprocal agreement to work or dual nationality.
• staff of foreign enterprises for the international road, air or maritime flag and foreign-
• expatriates who work in multinational companies or multinational banks services
• the foreign investor who has resigned or not the repatriation of invested capital or profits,
provided you keep a constant amount during the term of the contract not less than the 5
• artists, athletes, and generally those who act in public performances in the territory of the
Republic for a maximum period of three months a year.
Doing Business in Peru 16
An annual external audit by independent public accountants is mandatory in the following
• when the status of the company so provides
• when it is expressly requested by shareholders representing not less than 10% of the
outstanding shares entitled to vote
• in a sac. when requested by shareholders representing at least 50% of the outstanding shares
entitled to vote
• when the company has been formed by S.A.A.
• when special legislation for the establishment of this obligation
• when any company has revenues of more than 3000 tax units (approximately USD 4´055,556
for the year 2012).
Books and records
Legal persons are obliged to keep full accounts. The books must be legalized by a Public
Notary. Failure to do so is a violation punishable by a fine, which would even determine the
income tax on grounds alleged.
The fiscal year for all purposes in Peru is the calendar year. In that sense, the books must be
closed on 31 December of each calendar year.
The assets and liabilities should be detailed in the book of inventories and balances on the date
of commencement of operations and the end of each fiscal year. The detail of inventories at year
end should be kept in a separate book as part of major inventory book.
It allows the use of special journals in sheets, computer systems, other records necessary
ancillary and subsidiary ledgers. In some cases, the pages must be pre-numbered, authenticated
and bound at the close of each fiscal year.
The summary of the totals in the subsidiary ledgers should be entered in official books bound
monthly. However, the official books can replace each of the legal records.
The minutes of the meetings of shareholders and boards of directors must also register book
numbered and authenticated by Notary Public.
The minute books may also be taken through the loose-leaf, requiring that the pages are
numbered and authenticated.
External audit requirements
Doing Business in Peru 17
The Income Tax Act distinguishes five categories of different types of income, which are
grouped into capital income, business income and earned income. The taxable income of each
income group is declared and determined separately, no compensation occurring between them.
For purposes of the Income Tax are taxpayers, individual, undivided estates, associations and
similar general fact and legal persons.
Joint ventures and other business cooperation contracts are also considered as contributors if
they have independent accounts. Otherwise, the results are attributed to each part, which will be
eventually responsible to the tax authority.
Going by the companies is defined by the 30% rate on taxable income.
Taxpayers domiciled in Peru, whether natural or juridical persons are subject to the Income Tax
for its world-Income Tax and can deduct the tax paid abroad on foreign source income taxed by
the Peruvian Income Tax.
Non-domiciled taxpayers are taxed on their Peruvian source income. Foreign entities that
receive Peruvian source income are subject to withholding tax under the rates approved for that
Companies are taxed on their capital gains. The taxable income of legal persons domiciled in the
country, gained in the development of commercial activitie, is defined as gross income minus
total necessary expenses incurred in trade or business.
Incomes such as rents, royalties, interest, fees for services, among others, are considered third-
category income for businesses.
In general, for individuals on capital gains are subject to Income Tax, except those arising from
savings in financial entities and certain windfall.
Doing Business in Peru 18
The accounting records must be brought in Spanish and translated into soles. As an exception,
foreign investors that contract with the State may keep their accounts in foreign currency,
provided they have proper authorization from the government sector.
Income derived by companies should be allocated according to the accrual method. Also, this
rule applies to the allocation of expense.
Temporary or permanent differences arising from the application of tax regulations require the
adjustment of accounting records as a result, in the Tax return.
Gross revenue consists of the difference between net income and computable cost of goods sold.
Net income for these purposes is obtained by deducting from the gross income, rebates and
As a rule, business expenses are deductible if they are necessary to obtain the Income Tax or to
maintain the source of production. Meanwhile, the Income Tax Act establishes a limitation of
certain expenses that are subject to limit on deductibility.
Royalty payments, patents and equipment leasing are deductible without limit. On the other
hand, are deductible wages and salaries of employees and workers, whether Peruvian or foreign.
The costs of establishing businesses, including taxes, can be fully deductedin the first year or
amortized for a longer period, up to a maximum of 10 years. The same treatment applies to pre-
Depreciation of fixed assets
The depreciation method usually allowed for tax purposes is the straight line. The maximum
rates accepted by the tax admnistration are those listed in the Income Tax legislation itself.
Intangible assets are considered of limited duration to those whose life is limited by law or
nature. Amortization is permitted when the price is paid.
In these cases, the price paid can be deducted in one year or proportionally amortized within
10 years. Trademarks and patents transferred to society as a capital contribution cannot be
Brands and goodwill are not considered intangible assets of limited duration, so their prices
cannot be amortized for purposes of Income Tax.
The employer is required to make monthly deductions from the salaries of their workers and
pay them to the entity collecting taxes.
Doing Business in Peru 19
The Peruvian tax system operates on a self-assessment basis, subject to verification by the tax
administration, which has the right to inspect any given year within the limitation period.
The period of limitations is four years from the year following the filing of the tax return, six
years for those who have not filed affidavit, or 10 years when the withholding or collection
agent has not paid the tax withheld.
Foreign individuals who have carried out work in Peru must submit to the immigration
authority at the time of leaving the country, where communication of the contracting state
whether or not perceived Peruvian source income, withholding taxes applicable, and a statement
of assurance regarding the payment of taxes withheld. The contractor is responsible to the
Treasury the taxes withheld.
Consolidation of Financial Statements
Are not recognized for tax purposes to the consolidation of financial statements. Each company
is considered a separate taxpayer and losses of a company cannot be offset against profits in
another way, even in the case of business groups.
Income from liquidation of companies
The Income Tax does not tax income from the liquidation of companies to the extent that
constitutes a reimbursement of capital.
Peru has signed agreements with members of the Andean Community of Nations (ACN*) to
avoid double taxation.
There are also agreements to avoid double taxation with the governments of Canada, Brasil and
Value Added Tax (VAT)
This tax applies to the following activities:
• the sale of property in the country
• provision or use of services in the country
• import of goods
• construction contracts
• first sale of property made by the constructor.
*The member countries of the Andean Community are Bolivia, Colombia, Ecuador and Peru.
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The monthly tax that is determined eligible as tax credit is the VAT paid on purchase of goods
and services procurement. The difference between this and the tax debit, determines the VAT to
be paid each month. If the tax credit exceeds the VAT other period, the excess can be applied in
the following periods.
Sale of assets
A sale is considered completed when the goods are delivered to the buyer or when the invoice is
issued, whichever comes first. This is the time when tax liability arises. The tax must be added to
the selling price of the product sold, must be transferred to the buyer of the property.
All services provided within the Peruvian territory or those who are economically used in the
country are taxed with VAT. The main services that are exempt are as follows:
• credit services: services provided by banks and financial institutions and lenders
• public service of passenger transport within the country, except for air transport
• cargo transport service from the country to the outside and vice versa, as complementary
services to carry out such transportation the primary customs area
• construction, alteration, repair and hull vessels carrying on the high board companies in the
country to foreign flag vessels
• nominal interest on bonds issued by companies domiciled
• life insurance policies, provided that the voucher is issued for individuals residing in Peru
and insurance policies of credit insurance program for small business
• commercial service fee paid to persons not domiciled in connection with the sale of products
in the country from abroad, provided that the commission act as an intermediary between a
domiciled in the country and a non-resident and the commission is paid from abroad.
Nor are considered taxable exports of services, among others:
• consulting services and technical assistance
• leasing of property
• advertising services, market research and public opinion polls
• data processing services, implementation of software and the like
• placement and supply staff
• service fees for credit placements, financing operations
• insurance and reinsurance
• telecommunications services for telecommunications service completion originated abroad,
solely with respect to the compensation provided by foreign operators, according to the
rules of the Convention of International Telecommunication Union
• mediation and / or organization of tourist services provided by tourist operators domiciled
in the country on behalf of agencies or tour operators located abroad
• temporary assignment of rights of use or enjoyment of national audiovisual works and all
other national works that are expressed by process analogous to cinematography
• the power supply for individuals domiciled abroad provided it is used outside the country
• freight services that are made from the country to the outside and are made from abroad to
the country, as well as complementary services necessary to carry out such transport, made
in the primary zone and provided by Customs international cargo carriers domiciled in the
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• telephone support and any other nature that provides call centers and networking for
companies or users, not domiciled in the country, whose clients or potential clients
domiciled abroad, and provided it is used outside the country.
In the case of services, the tax liability arises when the invoice is issued or when payment is
received, whichever comes first.
Imports of goods
The tax liability in the case of import of goods originating from the date of the request for
release for consumption of the property (nationalization). The tax base is the CIF value of
goods plus the ad valorem duty on the CIF value.
This tax is affecting the sale of some specific goods, such as gasoline and its derivatives,
cigarettes, beer, liquor, vehicles, etc.
This contribution is taxed at 0.75% of total payroll, industrial companies, being paid only by
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Peru´s International Business Centre
Av. República de Panama 3030 - 8th Floor San Isidro
Lima 27 - Peru
T +51 (1) 615 6868
F +51 (1) 615 6888
Jose Luis Sarrio
Partner & IBC director
T +51 998 231 108
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