Peru enacts new rules for tax incentives of expenses related to research and development

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18 January 2023

Law 31659 increases the deduction rates of expenses related to Scientific Research, Technological Development, and Technological Innovation. These tax incentives will be valid until 31 December 2025.

On 30 December 2022, Peru enacted Law 31659, increasing the deduction rates for Scientific Research, Technological Development, and Technological Innovation expenses (R&D expenses). The new tax incentives are effective as of 1 January 2023 until 31 December 2025.

Background

Law 30309 introduced a temporary tax incentive allowing taxpayers to deduct R&D expenses, according to the following rules:

Taxpayers with net income not exceeding 2,300 Tax Units (approx. US$2,996,000) were entitled to deduct: (i) 215%: if the R&D project was carried out directly by the taxpayer or through a Peruvian R&D center; or (ii) 175%: if the R&D project was carried out through non-Peruvian R&D centers.

Taxpayers with net income exceeding 2,300 Tax Units were entitled to deduct: (i) 175%: if the R&D project was carried out directly by the taxpayer or through Peruvian R&D centers; or (ii) 150%: if the R&D project was carried out through non-Peruvian R&D centers.

The tax incentives expired on 31 December 2022.

Law 31659

Law 31659 increased the deduction rates for R&D expenses and has extended such tax incentives until 31 December 2025, as follows:

Taxpayers whose net income does not exceed 2,300 Tax Units are entitled to deduct: (i) 240%: if the R&D project is carried out directly by the taxpayer or through a Peruvian R&D center; or (ii) 190%: if the R&D project is carried out through non-Peruvian R&D centers.

Taxpayers whose net income exceeds 2,300 Tax Units are entitled to deduct: (i) 190%: if the R&D project is executed by the taxpayer itself or by a Peruvian R&D center; or (ii) 160%: if the R&D project is executed by a non-Peruvian R&D center.

Law 31659 is effective as of 1 January 2023 until 31 December 2025.

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

Ernst & Young Asesores Empresariales S.C.R.L, Lima

Roberto Cores | roberto.cores@pe.ey.com

Ramón Bueno-Tizón | ramon.bueno-tizon@pe.ey.com

Ingrid Zevallos | ingrid.zevallos@pe.ey.com

Claudia Miranda | claudia.miranda@pe.ey.com

Krizia Hurtado | krizia.hurtado@pe.ey.com

Ernst & Young LLP (United States), Latin American Business Center, New York

Lucas Moreno | lucas.moreno1@ey.com

Ana Mingramm | ana.mingramm@ey.com