Domestic corporations are required to withhold income tax with respect to income paid to non-resident entities at the following rates:
|Type of payment||WHT (%)|
|Dividends or profit distributions||5|
|Interest on non-related party loans, provided certain requirements are fulfilled||4.99|
|Interest on related party loans||30|
|Interest paid by Peruvian financial entities or banks to foreign beneficiaries for credit lines used in Peru||4.99|
|Lease of vessels or aircraft||10|
|Sale of securities within Peru (Lima Stock Exchange)||0 or 5|
|Sale of securities outside Peru||30|
Note that resident taxpayers may not deduct the WHT of a third party, except in the case of loans provided by non-resident creditors, to the extent that the debtor has contractually assumed the obligation of bearing the WHT cost.
If the retribution for technical assistance exceeds 140 tax units, a report issued by an audit firm will be required, in which is stated that the technical assistance has been effectively rendered in order to apply the 15% WHT rate; otherwise, a WHT rate of 30% will apply.
Capital gains derived from the sale of stocks issued by a Peruvian company through the Lima Stock Exchange are taxed at a 0% or 5% rate. See Capital gains in the Income determination section for a description of an exemption granted as of January 2016 until December 2022.
In the case of the services mentioned below that entail the execution of activities both in Peru and abroad, non-resident entities are subject to a 30% WHT (except for the lease of vessels and aircraft, which are subject to a 10% WHT) on deemed Peru-source income determined by applying the following percentages to gross income:
|Type of payment||Deemed Peruvian-source income (%)|
|Lease of vessels||80|
|Lease of aircraft||60|
|International news services||10|
|Distribution of movies, records, and similar products||20|
|Supply of containers||15|
|Demurrage of containers||80|
|Rights for broadcasting live foreign TV shows within Peru||20|
Peru has entered into treaties with Brazil, Canada, Chile, Korea, Mexico, Portugal and Switzerland regarding double taxation on income tax under the Organisation for Economic Co-operation and Development (OECD) Model. In addition, Peru recently subscribed a treaty to avoid double taxation with Japan, which dispositions will become effective on January 1, 2022.
Peru, as a member of the Andean Community, which also includes Bolivia, Colombia, and Ecuador, is subject to a double-taxation standard (based in source income and not on the OECD Model).
Please see the chart below for the reduced WHT rates that apply under DTTs in force.
|Dividends||Interest||Royalties||Technical assistance||Digital services|
|Portugal||10/15 (1)||10/15 (2)||15||10 (3)||N/A|
|Switzerland||10/15 (1)||10/15 (2)||15||10||10|
- The lower rate applies in case the beneficial owner is a company that controls at least 20% (Brazil), 10% (Canada, Portugal, and Switzerland), or 25% (Chile and Mexico) of the voting power in the company paying the dividends.
- The lower rate applies to loans from banks (Portugal and Switzerland) and sale on credit of industrial, commercial, and scientific equipment (Switzerland).
- The treaty rate applies to technical assistance in connection with copyrights, goods, or rights that generate royalties.