The standard VAT rate for Peru is 18%, which is made up of 16% VAT plus a municipal tax (Impuesto de Promoción Municipal) of 2%. Exports are subject to a nil VAT rate.

Exempt supplies include: agriculture; education; basic foodstuffs; low-value new residential buildings; financial services; public transport; public post; international freight transport; livestock; gambling; and live events.

Certain supplies are liable to withholding VAT, ‘SPOT’, of 4%, 10% or 12%. These include outsourcing services. Tax payers must split the VAT withheld, and remit it to a special VAT account with the national bank. Balances held on this account may be used to settle future liabilities or reclaimed after three months.

Small businesses may apply for a flat-rate VAT procedure, whereby they are set a fixed about of VAT due based on the size of their monthly turnover.

The current rates are:

There are detailed rules controlling the recording and processing of transactions for VAT. These include guidelines on:

• Invoices must be provided with all taxable supplies
• There is no simplified VAT invoice allowance
• FX amounts on any invoice must be converted at the prevailing SOL rate
• Electronic invoices are required of businesses identified by the General Tax and Customs Administration. These are generally large taxpayers.
• Credit notes may be provided, but must have a unique identification code and refer to the original sales invoice

Invoices must include the following information:

• Name, address and tax number of the supplier
• Name, address and tax number of the customer
• The word invoice “Factura” on the invoice
• Unique VAT number
• The tax number of the invoice printer
• Description of the goods or services
• Date of the invoice
• Amount charged, VAT and total gross value

The rules on determining when VAT is due, the time of supply, are as follows:

• When goods are delivered
• Earlier of invoice, payment or provision of supplies, including non-resident provided supplies
• Prepayment when cash is paid
• When goods clear customs for imports

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