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.

1. First Category: Income from letting property
2. Second Category: Investment income (capital investments, dividends, and royalties)
3. Third Category: Business income from a sole proprietorship and other income not specifically included in another category
4. Fourth Category: Income from independent professional services
5. 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.

UIT values have been rising every year. The UIT value for 2024 is PEN 5,150 (US$1,375).

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 earned by nonresidents from selling Peruvian property, considered as investment income, are taxed at a flat rate of 30%. The taxable gain is computed by deducting the invested capital (acquisition and improvement costs) from the gross selling price or market value of the property. These costs can only be deducted upon approval of the tax authorities.

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.

Net Worth Tax

Net worth tax is levied at 0.4% on the net assets of entrepreneurs exceeding PEN 1 million (US$267,097). This tax may be credited against business income tax liability.

Corporate Taxation

Income Tax

Income earned by companies is taxed at a flat corporate tax rate of 29.5%. Income-generating expenses are deductible when calculating taxable income.

Rental Income Tax

Rental income earned by corporations is taxed at a rate of 30%.

Capital Gains Tax

Capital gains realized by companies from transactions that are part of ordinary business activities are taxed at the standard progressive income tax rates.

Capital gains realized by companies from transactions not part of ordinary business activities are taxed at a special flat rate of 10%. A 5% withholding tax is levied on the transaction, which will then be credited against the taxpayer’s capital gains tax liability.

Property Buying and Selling Costs/Taxes

Property Tax

Real estate tax (Impuesto Predial) 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.

An official established tax unit (Unidad Impositiva Tributaria or UIT) is used to determine the tax liability. The UIT value for 2024 is PEN 5,150 (US$1,375), up from PEN 4,600 the year before.

Real Estate Tax

Real Estate Tax

Real estate tax is deductible for business income tax purposes.