Income tax in Peru
Taxation Researcher | June 20, 2022
INDIVIDUAL TAXATION
Nonresidents are taxed only on their Peruvian-sourced income. Married couples are taxed separately.
INCOME TAX (Impuesto a la Renta)
Taxable income is classified into five categories, according to the nature of income. Rules in computing taxable income depend on the income classification.
- First category: income from letting property
- Second category: investment income (capital investments, dividends and royalties)
- Third category: business income from a sole proprietorship and other income not specifically included in another category
- Fourth category: income from independent professional services
- Fifth category: employment income
Nonresidents are taxed at a flat rate of 30%. An official established tax unit (Unidad Impositiva Tributaria or UIT) is used to determine the tax liability. The UIT is a benchmark figure established to maintain the taxes, deductions, etc. at constant proportions to income.
The UIT value for 2016 is PEN3,950 (US$1,162). The UIT value for 2017 is PEN4,050 (US$1,191). The UIT value for 2018 is PEN4,150 (US$1,221). The UIT value for 2019 is PEN4,200 (US$1,235). The UIT value for 2020 is PEN4,300 (US$1,265). The UIT value for 2021 is PEN4,400 (US$1,294). The UIT value for 2022 is PEN4,600 (US$1,353).
INCOME TAX |
|
TAXABLE INCOME, UIT | TAX RATE |
Up to 5 UIT | 8% |
5 UIT - 20 UIT | 14% on band over 5 UIT |
20 UIT - 35 UIT | 17% on band over 20 UIT |
35 UIT - 45 UIT | 20% on band over 35 UIT |
Over 45 UIT | 30% on all income over 45 UIT |
INCOME TAX 2022 |
|
TAXABLE INCOME, UIT(US$) | TAX RATE |
Up to 23,000 (US$6,765) | 8% |
23,000 – 92,000 (US$27,059) | 14% on band over US$6,765 |
92,000 – 161,000 (US$47,353) | 17% on band over US$27,059 |
161,000 – 207,000 (US$60,882) | 20% on band over US$47,353 |
Over 207,000 (US$60,882) | 30% on all income over US$560,882 |
INCOME TAX 2017 |
|
TAXABLE INCOME, UIT(US$) | TAX RATE |
Up to 20,250 (US$5,956) | 8% |
20,250 - 81,000 (US$23,824) | 14% on band over US$5,956 |
81,000 - 141,750 (US$41,691) | 17% on band over US$23,824 |
141,750 - 182,250 (US$53,603) | 20% on band over US$41,691 |
Over 182,250 (US$53,603) | 30% on all income over US$53,603 |
INCOME TAX 2016 |
|
TAXABLE INCOME, UIT(US$) | TAX RATE |
Up to 19,750 (US$5,809) | 8% |
19,750 - 79,000 (US$23,235) | 14% on band over US$5,809 |
79,000 - 138,250 (US$40,661) | 17% on band over US$23,235 |
138,250 - 177,750 (US$52,279) | 20% on band over US$40,661 |
Over 213,300 (US$52,279) | 30% on all income over US$52,279 |
A taxpayer earning income from independent professional services (fourth category income) and employment income (fifth category income) can deduct a fixed amount, which is adjusted annually. No other deductions are allowed.
RENTAL INCOME
Rental income earned by nonresidents is subject to a 30% flat rate. Nonresidents are not entitled to any deductions.
The annual rent from leased property in general may not be less than 6% of the value of the property established for the purposes of local taxes.
VALUE ADDED TAX (Impuesto General a las Ventas)
Generally, leasing properties in Peru is liable to VAT at 18%. However, if the leasing of property is not effectively connected with a trade or business, the lease transaction is then not liable to this tax.
CAPITAL GAINS
Capital gains from selling real property are generally considered as investment income (second category income). Second category income will be subject to income tax at the rate of 5%. The tax base is 80% of the gross income since a standard deduction of 20% is given to account for notional expenses.
MUNICIPAL SALES TAX (Impuesto de Promoción Municipal)
The rules regarding transactions subject to VAT also apply to municipal sales tax which is levied at a flat 2% rate.PROPERTY TAX
Real Estate Tax (Impuesto Predial)
Real estate tax is levied on the cadastral value of the real estate, as assessed by the government, at progressive rates. The property owner is liable to pay this tax annually.
The UIT value for 2016 is PEN3,950 (US$1,162). The UIT value for 2017 is PEN4,050 (US$1,191). The UIT value for 2018 is PEN4,150 (US$1,221). The UIT value for 2019 is PEN4,200 (US$1,235). The UIT value for 2020 is PEN4,300 (US$1,265). The UIT value for 2021 is PEN4,400 (US$1,294). The UIT value for 2022 is PEN4,600 (US$1,353).
REAL ESTATE TAX |
|
TAX BASE, UIT (US$) | TAX RATE |
Up to 15 UIT | 0.2% |
15 UIT - 60 UIT | 0.6% on band over 15 UIT |
Over 60 UIT | 1.0% on band over 60 UIT |
REAL ESTATE TAX 2022 |
|
TAX BASE, PEN (US$) | TAX RATE |
Up to 69,000 (US$20,294) | 0.2% |
69,000 – 276,000 (US$81,177) | 0.6% on band over US$20,294 |
Over 276,000 (US$81,177) | 1.0% on band over US$81,177 |
REAL ESTATE TAX 2021 |
|
TAX BASE, PEN (US$) | TAX RATE |
Up to 66,000 (US$19,412) | 0.2% |
66,000 – 264,000 (US$77,647) | 0.6% on band over US$19,412 |
Over 264,000 (US$77,647) | 1.0% on band over US$77,647 |
REAL ESTATE TAX 2020 |
|
TAX BASE, PEN (US$) | TAX RATE |
Up to 64,500 (US$18,971) | 0.2% |
64,500 – 258,000 (US$75,882) | 0.6% on band over US$18,971 |
Over 258,000 (US$75,882) | 1.0% on band over US$75,882 |
REAL ESTATE TAX 2019 |
|
TAX BASE, PEN (US$) | TAX RATE |
Up to 63,000 (US$18,529) | 0.2% |
63,000 – 252,000 (US$74,118) | 0.6% on band over US$18,529 |
Over 252,000 (US$74,118) | 1.0% on band over US$74,118 |
REAL ESTATE TAX 2018 |
|
TAX BASE, PEN (US$) | TAX RATE |
62,250 – 249,000 (US$73,235) | 0.2% |
60,750 - 243,000 (US$71,471) | 0.6% on band over US$18,308 |
Over 249,000 (US$73,235) | 1.0% on band over US$73,235 |
REAL ESTATE TAX 2017 |
|
TAX BASE, PEN (US$) | TAX RATE |
Up to 60,750 (US$17,868) | 0.2% |
60,750 - 243,000 (US$71,471) | 0.6% on band over US$17,868 |
Over 243,000 (US$71,471) | 1.0% on band over US$71,471 |
REAL ESTATE TAX 2016 |
|
TAX BASE, PEN (US$) | TAX RATE |
Up to 59,250 (US$17,427) | 0.2% |
57,750 - 237,000 (US$69,706) | 0.6% on band over US$17,427 |
Over 237,000 (US$69,706) | 1.0% on band over US$69,706 |
Real estate tax is deductible for business income tax purposes.
Net Worth Tax
Net worth tax is levied at 0.4% on the net assets of entrepreneurs exceeding PEN1 million (US$294,118). This tax may be credited against business income tax liability.