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January 11, 2023

Peru enacts preferential depreciation rates for buildings, construction and hybrid and electric vehicles

  • Peruvian Congress enacted Law 31652 introducing preferential depreciation rates for buildings, construction, and hybrid and electric vehicles. The new regime became effective on 1 January 2023.

On 28 December 2022, Peruvian Congress enacted Law 31652, introducing preferential depreciation rates for specifics assets.


The current depreciation rates established under the Peruvian tax legislation for buildings, construction and electric and hybrid vehicles are the following:

Buildings and construction

  • The Peruvian Income Tax Law establishes a fixed rate of 5% (straight-line method) for buildings and construction.
  • Under the special depreciation regimen applicable in 2021 for buildings and construction, taxpayers were entitled to elect to apply a 20% rate if the following requirements were met: (i) the construction began on or after 1 January 2020; and (ii) 80% or more of the work was completed by 31 December 2020.

Hybrid and electric vehicles (except railroads)

  • The Peruvian Income Tax Law establishes a maximum annual rate of 20%.
  • Under the special depreciation regimen applicable for assets acquired in 2020 and 2021, taxpayers are entitled to elect to apply a maximum annual rate of 50%.

Law 31652

Law 31652 introduces preferential depreciation rates applicable as of 1 January 2023, for the following assets:

Buildings and construction

Taxpayers are entitled to use a maximum rate of 33.33% if the construction has started as of 1 January 2023; and at least 80% of the construction is completed by 31 December 2024. The 33.33% rate will not apply if the assets have been totally or partially built before 1 January 2023.

Hybrid and electric Vehicles

Taxpayers are entitled to use a maximum annual rate of 50%, for hybrid and electric vehicles acquired in 2023 and 2024.

Law 31652 is effective as of 1 January 2023.


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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