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January 11, 2023
Peru extends VAT exemption for specific goods and services and introduces a temporary early VAT recovery regime
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:
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:
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