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May 14, 2020 Peru enacts special depreciation rules due to COVID-19 On 10 May 2020, Peru’s Executive Power enacted Legislative Decree 1488, establishing special depreciation rules. This measure responds to the COVID-19 crisis. Legislative Decree 1488 is effective 1 January 2021. Background Currently, maximum annual depreciation percentages are as follows:
Legislative Decree 1488 Special depreciation regime The decree establishes a special depreciation regime under which taxpayers may claim 20% depreciation for buildings and construction if: (1) construction started on or after 1 January 2020; and (2) at least 80% of the construction is completed as of 31 December 2022. The 20% depreciation also may apply to assets acquired by taxpayers in tax years 2020, 2021 and 2022, provided the assets meet the requirements for the 20% depreciation. The 20% depreciation, however, will not apply if the assets have been totally or partially built before 1 January 2020. As part of the special depreciation regime, the legislative decree establishes the following annual depreciation percentages for assets acquired in tax years 2020 and 2021:
Depreciation provisions for hotels, travel and tourism agencies, restaurants and related services The legislative decree establishes a depreciation regime for hotels, travel and tourism agencies, restaurants, and related services. Under the regime, taxpayers may claim 20% depreciation for tax years 2021 and 2022 for buildings and construction that, as of 31 December 2020, had not been depreciated at all. Taxpayers may depreciate, at a 33.3% rate, ground transportation vehicles (except railways) that, as of 31 December 2020, had not been depreciated at all for tax years 2021 and 2022. ________________________________________________________ For additional information with respect to this Alert, please contact the following: Ernst & Young Asesores S.C.R.L, Lima
Ernst & Young LLP (United States), Latin American Business Center, New York
Ernst & Young Abogados, Latin America Business Center, Madrid
Ernst & Young LLP (United Kingdom), Latin American Business Center, London
Ernst & Young Tax Co., Latin American Business Center, Japan & Asia Pacific
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