Individual - Foreign tax relief and tax treaties

Last reviewed - 17 July 2020

Foreign tax relief

Taxpayers may claim a credit for income taxes paid abroad (subject to limitations).

Domiciled individuals are entitled to use taxes withheld or paid abroad as credit for the taxes paid on foreign income taxable in Peru, determined by their average Peruvian tax rate applied on their foreign income, up to a limit of the amount of tax actually paid abroad.

Tax treaties

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. Additionally, Peru has entered into a double-taxation treaty (DTT) with Japan, but it is still pending for ratification from the Peruvian Congress. In addition, Peru, as a member of the Andean Community of Nations (ACN), which also includes Bolivia, Colombia, and Ecuador, is subject to a double-taxation standard (based in source income and not on the OECD Model).