Tax In Peru

Tax In Peru

A Contractor’s Guide to Taxes :

One of the most consistently challenging aspects of contracting in Peru is complying with the country’s tax system. As well as paying tax in Peru, you might also still be eligible to pay some tax in your home country, and understanding the legislation behind this can be a challenge.

How do I calculate my taxable income:

If you’re working in Peru under a permanent contract, many employers will handle your tax under the PAYE (pay-as-you-earn) system. This means that they calculate and process your taxes in Peru for you and then send you a net wage. Your income tax, public health insurance, social security and other deductions will all be covered by this payment. This is the easiest way to handle your income tax in Peru, but contractors may not be offered this service because of their short stay with each employer.

Anybody who can’t pay their tax in Peru through PAYE is left with the prospect of doing everything themselves.

Do you know much about Peruvian Tax Law? Does Peru have a tax treaty with your home country? You will need to find out or find someone who can help! Income tax in Peru can range from 8 to 30 percent, and you need to be sure you are placed in the correct tax brackets.

Tax Calculator:

If you are a contractor and want a calculation on your tax and net retention in Peru, we can supply it to you free of charge.

Using an Umbrella Company for Income Tax :

Contractors in Peru are faced with masses of paperwork and numerous wasted hours filing a tax return unless they find an alternative option. A Peruvian umbrella company can act as your employer during your stay in the country whilst still allowing you the freedom of a contractor. The only difference is that you submit your timesheets to them; they’ll calculate and pay your taxes as you earn, and then you receive a net wage (as well as documentation for your records).

The companies are experts in Peruvian taxation, and they’ll ensure that you keep the largest proportion of your earnings whilst complying with local laws. They can deal with any issues with the Peruvian tax office or tax department directly including processing your tax refund if you are eligible.

How We Can Help You with Tax:

We work with numerous umbrella companies in Peru, many of whom are experts in tax and immigration laws. If you have any questions about tax in Peru, we’ll get the answers from them directly so you can rest assured you’ll be getting accurate information. We have comprehensive knowledge of the different services they provide, and can help you find the right company to handle your income tax. We help oil and gas workers, software developers, IT project managers, testers, business analysts and telecommunications contractors get tax efficient payments and sponsorship for their Peruvian work permit.

Our advice is 100 percent free, and comes with no obligations. You will be paying taxes in Peru but without the overhead of directly dealing with the Peru tax authorities. Get in touch with us today for some reliable advice on tax in Peru!

 

When Do You Need to Lodge Your Tax Return?:
The tax year is the calendar year (31 December). Tax returns may be lodged after the tax year ends.
Tax Filing Deadline :
Usually late March or early April. The specific date is determined each year by the Peruvian Tax Administration (SUNAT).
Can you file it online? :
Yes, you can file your personal income taxes online. See below.
Currency:
Peruvian sol (PEN)
Tax-free Threshold in:
None
Grossed Income:
Up to 5 ATU
Tax Rate:
8%
Grossed Income:
6 to 20 ATU
Tax Rate:
14%
Grossed Income:
20 to 35 ATU
Tax Rate:
17%
Grossed Income:
36 to 45 ATU
Tax Rate:
20%
Grossed Income:
Above 45 ATU
Tax Rate:
30%
How long does it take to set up:
26.5 days
How much does it cost:
Approx. PEN 1000 + registration fees which are composed by: 0.3% of capital + PEN 44 for performing the registration + PEN 9.72 per appointment of each director, manager or other representative, up to the limit of PEN 4,050.
Is it easy? :
Starting a Business Rank: 114 https://www.doingbusiness.org/data/exploreeconomies/peru
How to File Taxes in:

Individuals earning only employment income are not required to file tax returns. If the individual earns other forms of income, a tax return must be filed. The process to do this involves:

Step 1: Enter the online portal here(link is external). You may log in using your DNI (Identification Number) or your RUC (tax identification number). You may register for your RUC here(link is external).

Step 2: Choose the form that you want to submit by entering the form number or choosing from the menu. Key forms include:

  • Rental income form: N°1683
  • Disposal of property and other income: N°1685.

Step 3: Complete the form that you are required to file.

Step 4: Any balance due must be paid at the same time that returns are filed. After completing the tax return form, you will be required to select the bank to which you will pay any outstanding tax. The eligible banks include:

  • BCP
  • Banco de Comercio
  • Scotiabank
  • Interbank
  • Banco Financiero
  • HSBC

Step 5: After you pay the tax, you will be provided a certificate of declaration and/or confirmation of payment slip.

Notes:

For 2018, one ATU equals PEN 4,150

Does the 183 day rule apply in:

Yes

When do you become a tax resident in:

Residence in Peru is usually determined by an individual’s physical presence. In general, remaining more than 183 days in Peru results in residency and remaining 183 days abroad loses it.

Foreign citizens who were physically present in Peru for more than 183 days throughout any 12 month period, will acquire citizenship from 1 January of the subsequent calendar year.

Peruvian citizens who lost tax residency may regain the status on 1 January of the first calendar year after they return to Peru, unless they do it temporarily and stay in Peru no more than 183 days in any 12-month period.

Am I taxed on my global income in:

Yes, if you are a resident. Non-residents are subject to tax on their Peruvian-source income only.

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