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December 11, 2020

Peru repeals agribusiness preferential tax regime

On 4 December 2020, Peru enacted Law 31087, which repeals the special rules to promote agribusiness (i.e., agrarian regime) established in both Law 27360 and Urgency Decree 043-2019.


In 2000, Peru enacted Law 27360, establishing the agrarian regime, which provided the following benefits to agribusiness entities:

  • 15% corporate income tax rate
  • 20% depreciation rate for investments in hydraulic infrastructure and irrigation works
  • Value-added tax (VAT) recovery during the pre-operational stage for the acquisition of capital goods, inputs, services and construction contracts incurred, provided that the pre-operative stage is less than five years

The regime was extended until 31 December 2031 by Urgency Decree No. 043-2019.

Law 31087

With the repeal of Law 27360 and Urgency Decree 043-2019, agribusiness entities will be subject to the general tax regime beginning 1 January 2021. Under that regime, agribusiness entities will be subject to:

  • A 29.5% corporate Income tax rate
  • A 10% depreciation rate on investments in hydraulic infrastructure and irrigation works

The agribusiness entities also are subject to the early VAT recovery regime, provided they meet the following requirements:

  1. The entities make an investment of at least US$5 million in any project.
  2. The pre-operative stage of the project (time incurred until the first invoice is issued for the project) is not less than two years.


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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