Peru Withholding VAT non-resident digital services Dec 2024

Foreign providers selling digital services B2C must withhold general sales tax

Peru is the latest country to join the taxing offshore digital services trend. From 1 December 2024 (delayed from original Oct 2024 launch), non-resident providers, facilitating marketplaces or intermediary platforms must withhold general sales tax General sales tax (impuesto general a las ventas (IGV)) on sales to local consumers of digital or intangible services. This is done by registering with the tax authorities (Registro Único de Contribuyentes) as withholding tax agents. Taxes withheld are then paid over by the 10th working day of the following month.

SUNAT, the tax authority, has created a special VAT return for declaring taxes withheld. This will be reported online, with the facility to make tax payments in local currency or US$.

The current VAT rate in Peru is 18%. There is no mention of a VAT registration threshold in the legislative decree.  And only refers to B2C transactions. VAT also applies to the commissions accepted by intermediaries of the digital services.

Following several years of delays, the legislation was approved and then gazetted on 4 August 2024.

Peru is aiming for a withholding VAT model rather than compelling foreign providers to VAT register. The obligation to hold back the VAT would fall on payment providers – credit card merchants; debit cards; wire transfers; ewallets etc. B2B transactions would be subject to the withholding tax – taxpayers can claim a tax credit if tax has been withheld and paid by a non-domiciled supplier.

IGV on digital services

The services included within the bill are:

• Software support;
• Technical support to a customer’s network;
• Storage of information (data warehousing);
• Implementation of hosting (application hosting);
• Access to social networks;
• Application services supply (application service provider – ASP);
• Storage of website (web hosting);
• Electronic access to consulting services;
• Streaming or download of media;
• Digital newspapers and magazines;
• Advertising;
• Online auctions;
• Information distribution;
• Access to an interactive website;
• Interactive training; and
• Online sale sites/portals.

Verify the right VAT or GST calculations on individual or batch transactions with our Advisor and Auditor services. This includes remote e-services.

Determining the place of supply as Peru

In order to establish if the place of supply is Peru, and therefore VAT due, providers or digital platforms my rely on the following information:

• Payment details (bank or credit card address;
• IP address of the customer;
• Postal address of the customer; or
• Customer SIM code.

Central and South America VAT on digital services