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Peru Corporate - Tax credits and incentives

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Foreign tax credit

Pursuant to the PITL, taxpayers may deduct the foreign income taxes paid due to their foreign-source income levied by the PITL, provided that it doesn't exceed the amount that results from applying the average rate of the taxpayer to the incomes obtained abroad, or the tax paid abroad. The amount that, for any circumstance, is not used in the corresponding fiscal year cannot be set off (or compensated) in others fiscal years or be refunded.

Also, the following will be taken into account:

  • Tax credit will be granted for the entire tax paid abroad that falls upon income taxed by the PITL.
  • Taxes paid abroad, whatever its denomination, shall bear the characteristics of income taxes.
  • Tax credit will only be granted when the payment of the foreign income tax is supported by reliable documentation.

Special deduction regime for projects related to scientific research, technological development, and technological innovation

A special deduction regime has been established for projects related to scientific research, technological development, and technological innovation as of 2016. According to this incentive, taxpayers investing in these projects will be able to deduct 150% or 175% of the expenses incurred in them.

 In that sense, the taxpayer may have the following deductions:

  • 175% of the expenses incurred if the project is executed directly by the taxpayer or through centres of scientific research, technological development, and technological innovation domiciled in Peru.
  • 150% of the expenses incurred if the project is executed by non-domiciled centres of scientific research, technological development, and technological innovation.

There are some requirements that must be fulfilled in order to access the benefit.

Early recovery of VAT

Companies in a preoperative stage with large projects in process may apply for early recovery of VAT prior to commencing operations. An investment agreement with the government (the Ministry of its sector) is required.

Stability agreement

Investors may enter into stability agreements with the government, either under the general regime or specific regimes (i.e. mining and petroleum).

Under the general regime, investors may enter into Juridical Stability Agreements that guarantee the following advantages for a ten-year period:

  • Stability of the income tax regime in force at the time the agreement is entered into with respect to dividends and profit distribution.
  • Stability of the Peruvian government monetary policy, according to which there is a complete absence of exchange controls, foreign currency can be freely acquired or sold at whatever exchange rate the market offers, and funds can be remitted abroad without any previous authorisation.
  • Right of non-discrimination between foreign and local investors.

Under the mining regime, local mining companies may enter into stability agreements of guarantees and investment promotion measures that guarantee the following for 10, 12, or 15 years:

  • Stability of the overall tax regime.
  • Stability of the overall administrative regime.
  • Free disposition of funds (foreign currency) arising from export operations.
  • No exchange rate discrimination.
  • Free trade of products.
  • Stability of special regimes for tax refunds, temporary importation, etc.

Oil and gas companies may enter into stability agreements that guarantee the following for the term of the contract:

  • Stability of the overall tax regime.
  • Free disposition of funds (foreign currency) arising from export operations.
  • Free convertibility of its funds.
  • Free trade of products.

Investment promotion in the Amazon

Certain tax benefits with regard to VAT and income tax have been established for taxpayers located in the area designated by the law as the ‘Amazon’ and that are engaged in the following activities:

  • Agriculture and livestock enterprises.
  • Aquaculture.
  • Fishing.
  • Tourism.
  • Manufacturing activities linked to the processing, transformation, and commercialisation of primary products originating in the activities listed above and in forest transformation, provided these products are produced in the area.

Special zones - Centres of Export, Transformation, Industry, Commercialisation, and Services (CETICOS)

CETICOS are geographical areas duly delimited with customs primary zone status and special treatment, destined to generate development poles through industrial, maquila, assembling, or storage activities. CETICOS are located in Paita, Ilo, and Matarani cities.

Agribusiness and agro-exporting activities may be performed within a CETICOS. Agribusiness activity is primarily the transformation of agro-farming products produced in the country. Such transformation must be carried out at CETICOS.

Companies engaged in industrial, maquila, or assembling activities, established or set up in the CETICOS, until 31 December 2022, are exempt from income tax, VAT, excise tax, municipal promotion tax, as well as from any other taxes, fees, contributions levied by the Central Administration, and even taxes that require express exempt regulation.


Last Reviewed - 01 June 2017

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