On 29 December 2024, the Peruvian Government enacted Laws 32217, 32218, 32219 and 32220 to extend the validity of certain tax benefits and exemptions and to incorporate new Income Tax exemptions. The enacted laws are highlighted below.

Law 32217

On 28 June 2008, Legislative Decree 1058 was enacted, promoting investment in electricity generation with hydric and other renewable resources. The Legislative Decree allowed accelerated depreciation under a global annual depreciation rate of up to 20% for machinery, equipment and civil works necessary for the installation and operation of the plant. This benefit would have been in effect until 31 December 2025.

However, under Law 32217, the accelerated depreciation tax benefit for income tax purposes has been extended until 31 December 2030. This benefit applies to machinery, equipment and construction work necessary for the generation of electricity using hydric resources and other renewable resources.

Law 32218

Under the Income Tax Law, capital gains and interest derived from securities issued by the Peruvian Government are tax exempt.

In this regard, Law 32218 incorporates two new scenarios for the exemption on securities issued by the Peruvian Government. Thus, interest and capital gains originating from the following transactions are also exempted from income tax:

1. Repurchase transactions in which the securities that the acquirer receives from the transferor are Public Treasury Bills issued by the Peruvian Government, as well as bonds and other debt securities issued by the Peruvian Government
2. Disposal of units of participation in Exchange Traded Funds (ETF), which aim to replicate the profitability of publicly available indexes, built on the basis of the instruments mentioned in #1, above

Law 32219

Law 31556, enacted in November 2022, promotes economic reactivation measures for micro and small businesses in the areas of restaurants, hotels and lodging. The law establishes that the sale of goods and services by these businesses are taxed exceptionally with the VAT rate of 8% until 31 December 2024.

Law 32219 extends the validity of this benefit until 31 December 2026. The rate will be increased to 12% as from 1 January 2027 to 31 December 2027, and the general 18% rate will apply from 1 January 2028 onward.

Law 32220

Legislative Decree 1634, enacted in August 2024, approved the special installment payment regime for tax due by 31 December 2023. To qualify for a special installment payment, the taxpayer had to file a request by 20 December 2024. (For more details, see EY Global Tax Alert, Peru enacts Special Installment Payment regime for tax debts due by 31 December 2023, dated 20 September 2024).

Law 32220 extends the term for taxpayers to submit the application for Special Tax Installment Payments until 28 February 2025.

Implications

These laws allow multinationals with presence in Peru engaged in energy or hospitality business an extension of certain tax benefits, such as accelerated depreciation and reduced VAT rate. Likewise, multinationals with Peruvian subsidiaries having tax debts due by 31 December 2023 may submit the application for Special Tax Installment Payments until 28 February 2025.