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January 11, 2023

Peru extends VAT exemption for specific goods and services and introduces a temporary early VAT recovery regime

  • Law 31651, enacted on 29 December 2022, has extended the Value-Added Tax (VAT) exemption for specific goods and services until 31 December 2025.

  • Law 31661, enacted on 30 December 2022, introduced an exceptional early VAT recovery regime applicable until 31 December 2024 for taxpayers with a minimun investment of US$2 million.

Peru recently enacted two VAT measures for extending the VAT exemption for specific goods and services (Law 31651); and introducing a temporary and exceptional early VAT recovery regime (Law 31661).

Extension of the VAT exemption for specific goods and services

The Peruvian VAT legislation established a tax exemption for specific goods and services. This exemption was set to expire on 31 December 2022.

Law 31651, enacted on 29 December 2022, has extended the VAT exemption for such goods and services until 31 December 2025. The list of goods and services includes, among others, the following:

  • Sale or import of certain goods (fish, crustaceans, mollusks, fresh or refrigerated potatoes, beans, artichokes, among others)
  • Public transportation services within the country, except for public rail passenger transportation and air transportation
  • Cargo transportation services from Peru to foreign countries and from foreign countries to Peru
  • Live cultural shows
  • Interest from collection of credits transferred by banking entities to securitization companies, trusts or investment funds

Temporary and exceptional early VAT recovery regime

Peru currently has a general early VAT recovery system that is applicable for entities with investments complying with the following requirements:

  • Minimum investment of US$5 million
  • Projects with a preoperative stage of at least two years

On 30 December 2022, Peru enacted Law 31661 establishing a temporary and exceptional VAT early recovery regime applicable until 31 December 2024. This additional regime allows taxpayers to elect to apply for the early VAT recovery system if the investment is at least US$2 million.

Law 31661 is effective as of 1 January 2023 until 31 December 2024.


For additional information with respect to this Alert, please contact the following: 

Ernst & Young Asesores Empresariales S. Civil de 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


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