Sign up for tax alert emails    GTNU homepage    Tax newsroom    Email document    Print document    Download document

October 27, 2022

Peru enacts regulations on temporary VAT reduction for specific hotels and restaurants

  • Regulations of Law 31556 provides detailed rules and guidelines for taxpayers engaged in activities related to hotels and restaurants to benefit from the reduced Value Added Tax (VAT) rate.

On 13 October 2022, Peru’s President enacted Regulations of Law 31556 (the regulations) for the temporary VAT reduction for specific hotels and restaurants, through Supreme Decree 237-2022.


On 12 August 2022, Peru’s President enacted Law 31556 establishing a reduced VAT rate of 10% (8% VAT rate plus 2% promotion municipal tax) for restaurants and hotels, in comparison with the general VAT rate of 18%. The reduced VAT rate of 10% is effective from 1 September 2022 to 31 December 2024.

To apply for the reduced VAT rate, the taxpayer must meet the following conditions:

  • The taxpayer’s primary business is conducting hotel and restaurant activities.
  • The taxpayer is a part of the micro and small companies’ regime (annual sales of no more than approx. US$2,057,890).
  • At least 70% of the taxpayer’s total income comes from hotel and restaurant activities.
  • The taxpayer must not be part of an economic group.

Supreme Decree 237-2022

The regulations establish detailed rules and guidelines to be met by hotels and restaurants to qualify for the reduced VAT rate of 10%. The main measures are:

Annual sales must not exceed 1,700 Taxable Unit (approx. US$1,979,746) under the micro and small companies’ regime

The annual sales limit is equivalent to the total amount resulting from the sum of the net income registered in the last 12-month VAT returns. The regulations also provide specific rules for calculating the annual net income for taxpayers under reorganization structures or those starting their business activities.

At least 70% of the total income derives from hotel and restaurant activities

In order to calculate the 70% minimum limit, the income from the sale and rendering of services of the hotel and restaurant activities must be divided by the total income obtained by the taxpayer multiplied by 100. The taxpayer will benefit from the VAT reduced rate in the month following the one where the 70% minimum limit is met.

The taxpayer must not be part of an economic group

An economic group is defined as a group of companies, regardless of their business activities, under the control of the same entity or individual. Among others, two or more companies are considered to be economically related when:

  • An individual or legal entity owns more than 30% of the capital of another entity, directly or through a third party.
  • More than 30% of the capital of two or more legal entities belongs to the same individual or legal entity, directly or through a third party.
  • The capital of two or more legal entities belongs more than 30% to the same shareholders.
  • The legal entities have common directors and managers with decision-making power in the financial, operational or commercial agreements.

Supreme Decree 237-2022 is effective on 14 October 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 LLP (United Kingdom), Latin American Business Center, London

Ernst & Young Tax Co., Latin American Business Center, Japan & Asia Pacific


The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting or tax advice or opinion provided by Ernst & Young LLP to the reader. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader's specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. The reader should contact his or her Ernst & Young LLP or other tax professional prior to taking any action based upon this information. Ernst & Young LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.


Copyright © 2024, Ernst & Young LLP.


All rights reserved. No part of this document may be reproduced, retransmitted or otherwise redistributed in any form or by any means, electronic or mechanical, including by photocopying, facsimile transmission, recording, rekeying, or using any information storage and retrieval system, without written permission from Ernst & Young LLP.


Any U.S. tax advice contained herein was not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions.


"EY" refers to the global organisation, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.


Privacy  |  Cookies  |  BCR  |  Legal  |  Global Code of Conduct Opt out of all email from EY Global Limited.


Cookie Settings

This site uses cookies to provide you with a personalized browsing experience and allows us to understand more about you. More information on the cookies we use can be found here. By clicking 'Yes, I accept' you agree and consent to our use of cookies. More information on what these cookies are and how we use them, including how you can manage them, is outlined in our Privacy Notice. Please note that your decision to decline the use of cookies is limited to this site only, and not in relation to other EY sites or Please refer to the privacy notice/policy on these sites for more information.

Yes, I accept         Find out more