Peru

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TAXES - ACCOUNTING

 

 

Corporate tax

Tax rate for resident companies

Tax rate of 27% on the net profit. The distribution of profits to non-residents is taxed generally at 4.1%, which leads then to an effective tax rate of 30%. A special regime applies to small businessmen and some low income companies, the tax rate is then 2.5% of the monthly incomes.

   
Tax rate on long-term capital gains Capital gains are taxed in Peru at the rate of 30%.
   
System governing groups of companies and dividends paid by subsidiaries to their parent companies Dividends are subjected to a withholding tax at the rate of 4%.
   
Tax rate on branches Branches are subjected to the same tax as the Peruvian companies at the rate of 30%.




Income tax

Fiscal year The fiscal year begins on January 1st and ends on December 31st of the same year.
   
Income tax rate Levy on individuals incomes is made according to a system of annual units. The rate of a unity is fixed annually by the government. A unity is equal to 3,100 PEN:
0 to 27 units 15%
27 to 54 units 21%
Beyond 54 units 27%
   
Tax deductions or other allowances The taxpayers benefit from various deductions according to the nature of their income (salary, pension, etc.). For example, the employees of a company benefit from a tax relief of 20%.



VAT rates

Standard rates 19%
   
Reduced rates 2%
Exemptions include some basic foodstuffs, urban passenger transport, the international transport of cargo, life assurance polices, some financial products, books and the construction and maintenance of ships.



Other important taxes


Name of tax
Rate
Entertainment tax, financial transactions tax, industrial training fund levy, municipal tax on real property  
 


 

Accounting

Introduction
In Peru, 3 big phases of evolution have been necessary to recognize the importance of accounting as element of decision :
- Before 1955, the Code of the Business dated 1902 required from companies to have a basic accounting system
- Between 1955 and 1974 : the resolution n356 authorizes companies to use mechanical systems for the bookkeeping. Documents must be numbered, monthly summarized and annually regrouped.
- Since 1974 : the Peruvian accounting system is influenced by the French, American and Italian systems because the companies employ accounting software packages coming from other countries.


General accounting principles
As the structure of accounts and big masses are inspired by various models, it is difficult to establish a precise plan of their presentation.

Obligations and publications
Accounts must be established in national currency in agreement with the new accounting plan introduced in 1987. Accounting must be kept in accordance with current standards but companies have no obligation in terms of structure for annual reports : nevertheless, they have to publish a balance sheet, a profit and loss account and annexes which should be guaranteed by an independent auditor.

Certification and auditing
The certification of accounts became compulsory in Peru in 1974, with the creation of the "Commission Nacional de Empresas y Valores". The national accounting system was implemented in 1987 to harmonize and standardize operations and financial results.
Only the accountants who hold the public Certified Accountant's status are authorized to control and guarantee the accounts of companies.

Professionals and representative organizations
" Commission Nacional de Empresas y Valores ".



Useful links
the Ministry of Finance of Peru (website in Spanish)

Last modified in January 2007
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