How to Reclaim Peruvian VAT

You can reclaim VAT in Peru.

Like many nations, Peru assess a Value Added Tax (VAT) on certain goods and services. The VAT is applied when goods are sold, services are performed, when a builder makes the initial sale of real estate, on construction projects and when goods are imported. While the tax is a burden, you can recover the VAT you have paid, provided that the tax was assessed in connection with a business activity. To recover this tax, you must file on a monthly basis.

Things You'll Need

• Tax invoice

Instructions

1. Take out and examine the tax invoice for a business transaction. The invoice must show the date it was issued, invoice number, supplier taxpayer identification number, customer taxpayer identification number, name and address of the supplier, your name and address, amount of goods, unit price, discount rate, tax rate and total price.

2. Determine the amount of the output VAT, the amount charged to your customer. Then determine the amount of the input VAT, the amount that your business paid to the other business when you procured goods for your business. The rate in Peru is 19 percent.

   For example: If you sold the goods for $1,000, the output VAT equals $190. If you procured the goods for $800, the input VAT equals $152.

3. Subtract the input VAT from the output VAT to reclaim the VAT tax. This yields the amount that you owe the government or the amount that is refunded to you. If the number is positive, you owe the government. If the number is negative, you receive a refund. Using the example in Step 2, you would owe the government $38.

Tips & Warnings

• Register with the Peruvian Tax Authority to receive a taxpayer identification number. Failing to register can result in a financial penalty.

References

• KPMJ: Global Indirect Tax Services Peru Country Fact File
• Deloitte International Tax: Peru Highlights