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Taxes in Peru for Foreign Companies: Tax Guide

February 20, 2026

Invest in Peru

When a foreign company decides to operate in Peru—either directly or through a subsidiary or branch—it is essential to understand the local tax regime to plan efficiently, properly and avoid contingencies. In this guide, we explain What taxes apply to foreign companies in Peru, how does the Peruvian fountain rent, the withholding for services provided from abroad, the IGV, transfer pricing and international conventions that help to avoid double taxation.

What taxes do foreign companies pay in Peru?

Foreign companies that carry out economic activities in Peru are subject to the same taxes as a domestic company, with respect to their revenues generated in Peruvian territory. The main taxes are:

Income Tax (IR)
General Sales Tax (IGV)
Withholding for foreign services
Municipal taxes (if applicable)
Labor taxes and contributions if there are workers

Peruvian source income: tax for non-domiciled companies

El Income Tax applies only to income from a Peruvian source when the company is not domiciled in the country.

Domicilized companies are taxed on their worldwide income.
Non-Domicilized Companies are taxed only on their income from a Peruvian source.

Applicable rates:

Business income (if the company has a permanent establishment or branch office): 29.5%.
General services provided from abroad without a presence in Peru: 30% withholding does not apply, unless it is carried out in Peru.

Specific services: Any digital (essentially automatic) or technical assistance service used economically in Peru is considered income from a Peruvian source, regardless of where it was provided. The withholding would be 30% or 15%, respectively.

Foreign companies must consider this tax burden when listing their services to Peru. Reduced rates may apply by agreement with other countries.

Permanent Establishment

According to domestic regulations, a permanent establishment of a foreign company is established in Peru in the following situations:

Fixed place of business
Construction works or projects of more than 183 days in any 12-month period
Services longer than 183 days in any 12-month period
Agent in the country that concludes contracts on behalf of the foreign company.

The definition of permanent establishment in the agreements should be reviewed to identify the applicable rule.

Withholding for services provided from abroad

When a Peruvian company (or branch of a foreign company) contracts services from a foreign company, it must apply withholding depending on the type of service (general, technical assistance, digital). If other types of benefits are provided, the applicable withholding must be determined.

The withholding must be declared and paid monthly in SUNAT (PDT form).

Taxes for posted workers

Foreign company workers who are sent to Peru to do part of their work here generate Peruvian income taxed with Income Tax.

The tax will apply to the portion of the salary that comes from a Peruvian source and must be paid directly to the Banco de la Nación del Peru.

Transfer pricing in Peru and related companies

If a foreign company transacts with its branch, subsidiary or related parties in Peru, it must apply the principle of free competition (Arm's Length).

Obligations:

Local Documentation (Local Report).
Master Report.
Country-by-Country Report (if the group qualifies).

It applies if:

Transactions are carried out between related parties.
Transactions are carried out with companies domiciled in non-cooperating countries, preferential regimes or regimes with low or no taxation.

SUNAT requires annual reports if certain thresholds are exceeded. Penalties for omission can be high.

The tax burden in Peru can be reasonable if properly planned

Agreements to avoid double taxation signed by Peru

Peru has signed agreements to avoid double taxation with several countries. These treaties make it possible to reduce or eliminate the double tax burden on cross-border services, dividends, interest or royalties.

Main countries with a current agreement:

Andean Community (Ecuador, Colombia and Bolivia)
Chile
Canada
Brazil
Mexico
Portugal
South Korea
Switzerland
Japan (ratified, gradually being implemented)

Common Benefits:

Retention reduction to 15%, 10% or even 0%.
Exemption from taxes on certain types of income.
Prevention of legal and economic double taxation.

To apply these benefits, it is necessary to present the current “Certificate of Tax Residence” from the country of origin.

IGV in Peru for foreign companies: what you need to know

El IGV (equivalent to VAT) is 18% and applies to transactions involving the sale of goods, provision of services, construction contracts, importation, among others.

If the foreign company has a registered branch or branch, you must issue electronic receipts with IGV.
When importing services, the Peruvian user assume the burden of the IGV as a non-domiciled IGV, generating tax credit.
Digital services provided by foreign companies for natural persons are taxed with IGV. Foreign companies must register with the RUC to declare and pay the tax directly.

A foreign company can recover the IGV if it is domiciled and has taxed transactions.

Tax liabilities of foreign branches and subsidiaries

Branches and subsidiaries domiciled in Peru have the same formal obligations as any local company:

Enroll in the RUC.
Keep accounting books according to the tax regime.
File monthly and annual returns.
Issue electronic receipts.
Record spreadsheets if they hire workers.

Mismanagement of these obligations can result in fines, interest and tax observations in future audits.

Key Tips for Planning Taxes on Foreign Companies

Evaluate whether it is appropriate to operate as a branch or establish a subsidiary.
Consider the total tax burden (IR, VAT, withholding) when setting prices.
Check if your country has an agreement with Peru to avoid double taxation.
Anticipate transfer pricing obligations if you operate in a group.
Seek advice to apply regulations correctly and avoid sanctions.

Avoid tax risks with specialized advice

The tax burden in Peru can be reasonable if properly planned. However, for foreign companies, ignorance of local regulations can create costly contingencies. Therefore, it is key to have a specialized legal and tax advice from the start.

At EBS Abogados, we help foreign companies to set up and operate in Peru, complying with all their tax obligations, optimizing their tax structure and avoiding risks.