Peru offers more than amazing sights and historic culture. This wonderful destination opens a whole lot of business and employment prospects. If you are looking forward to this opportunity, then it's practical to know certain stipulations and regulations, most importantly Peru Accounting and Tax Methods.
Here are some of the most fundamental information you need to know before starting up a new business or looking for a job in Peru. Read below to get a basic idea on how the Peruvian government sets its accounting and tax regulations.
What are the Accounting Regulations in Peru?
The first thing you need to know about Peru Accounting and Tax regulations is that all legal entities must register with the Superintendencia Nacional de Administración Tributaria (SUNAT), or the National Superintendency of Tax Administration. This step will help you build a legal foundation for your business. The last thing you want to happen is to be sued by the government due to illegal business entry.
Every Peruvian business must file an annual tax return with SUNAT on the first week of April following the end of the previous fiscal year.
To avoid double taxation, Peru has signed 7 treaties with countries including Brazil, Chile, Canada, Portugal, South Korea, Switzerland, and Mexico. These treaties are based on the OECD Model Tax Convention.
Operational business losses may be carried over for up to four years or for an unlimited time period. The law does not allow carryback of losses.
Generally speaking, it is important to be knowledgeable with the corporate and personal tax obligations within your country of residence and within Peru. This will enable you to fulfill obligations consistently and lawfully.
What are the Tax Rates in Peru?
The tax rates in Peru typically depend on the type of income and residency, among a few other stipulations. Take a look at our list below for some of the more significant tax rules in Peru.
At present, the Corporate Income Tax is 29.5%. This rate remains constant until Peru Tax laws have been amended by the legislative department.
Capital gains are treated as normal corporate income; thus, they the rate is 29.5% as well.
The Value Added Tax (VAT) in Peru is 18% (16% of VAT itself plus 2% of municipal promotion tax).
Royalties paid to non-resident and resident companies, as well as the interest paid to non-resident entities, are subject to a 29.5% withholding tax.
There is a 4% withholding tax for dividends paid to non-resident companies.
There is a 15% withholding tax for technical services fees received by both resident and non-resident companies.
Employees must return 8% of their gross monthly salary to the employer's social tax scheme. This is according to the Peruvian law.
Property tax is up to 1% depending on the property value.
The transfer of real estate is subject to a 3% transfer tax.
A temporary net assets tax of 0.4% will apply to assets over USD$333,000.
These Peru Accounting and Tax basics will help you understand how to budget and handle your finances every time a tax season rolls around. There are more to know, however, but you'll get a grip eventually.
If you need more information on Peru's accounting regulations or tax laws, our professional team at Peru Corporate Office will be happy to help you. We can provide you with practical legal guidance for your business in Peru.