Specific obligations may vary depending on the type of taxpayer, the economic activity, the tax regime, the registered tax address, and the characteristics of each transaction.
What is a tax obligation?
A tax obligation is a financial obligation established by law to fund government activities and services. Under the Peruvian Tax Code, the term “tax” or “levy” includes taxes, contributions, and fees.
A tax differs from a fee because its payment does not necessarily result in a direct and individualized service or benefit for the taxpayer.
Income Tax
According to the Income Tax Law, income is classified into five categories:
First category:
This category mainly includes income generated by:
the lease or rental of real estate;
subleasing;
the temporary transfer of movable or immovable property;
certain transfers made free of charge or without a specified price, where applicable.
An example is the income received by a person from renting out a house, apartment, commercial premises, plot of land, or vehicle.
Second category:
This category includes certain types of capital income not included in the first category, such as:
interest;
royalties;
dividends;
gains from the sale of shares and other securities;
certain capital gains;
income from the permanent transfer of rights.
The tax treatment, rate, and payment method may vary according to the type of income. Not all second-category income is calculated or reported in the same way.
Third category:
This category includes income derived from business activities, such as:
commerce;
industry;
mining;
agricultural and livestock activities;
construction;
business-related services;
activities carried out by companies and other legal entities;
businesses habitually operated by individuals.
The calculation of the tax depends on the tax regime applicable to the business, such as the General Regime, the MYPE Tax Regime, the Special Income Tax Regime, or the New Simplified Single Regime, where applicable.
Fourth category:
This category includes income obtained from independently performed personal work.
It includes, among other forms of income, earnings obtained through the individual practice of:
professions;
arts;
sciences;
trades;
services provided against professional fee receipts.
It may also include certain functions, such as those performed by company directors, agents, business managers, or estate executors, in accordance with tax legislation.
Fifth category:
This category includes income obtained from work performed under an employment relationship.
It includes, among other forms of compensation:
wages;
salaries;
statutory bonuses;
additional bonuses;
commissions;
other taxable employment compensation.
The employer normally calculates and withholds the employee’s applicable income tax through payroll.
Selective Consumption Tax
The Selective Consumption Tax is an indirect tax applied only to certain goods and activities specified by law.
Products that may be subject to this tax include:
fuels;
cigarettes;
alcoholic beverages;
new vehicles;
certain other beverages;
some goods regarded as luxury items.
One of its purposes is to discourage the consumption of products that may have negative consequences for public health, society, or the environment. It may also impose a higher tax burden on certain goods considered to be luxury products.
Financial Transactions Tax (ITF)
The Financial Transactions Tax applies to certain transactions carried out in Peruvian or foreign currency, such as debits and credits in accounts within the financial system.
The current ITF rate is 0.005% of the value of each taxable transaction. This tax may be deductible for income tax purposes, subject to the conditions established by tax regulations.
