Effective December 1, 2024, nonresident providers of digital services are required to register for, collect, and remit an 18% value added tax (VAT) on the cross-border provision of digital services to consumers located in Peru.
- Digital services in scope: Digital services include online streaming, information storage, social network access, online publications, remote conferencing, and services facilitating sales. VAT also applies to intangible goods downloaded online. However, the rules do not apply to tangible property imported into Peru.
- B2B vs. B2C: The rules target business-to-consumer (B2C) sales to natural persons not registered for VAT in Peru, but VAT charged to registered individuals can be reclaimed.
- Customer location: A customer’s location can be determined by Internet Protocol (IP) address, SIM card country code, billing address, or bank details.
- Marketplace rules: There are no specific provisions shifting the VAT obligation from the digital services provider to nonresident digital intermediaries facilitating such sale. Therefore, any VAT due on a transaction made through a third-party digital intermediary remains the responsibility of the original seller.
- Registration: Nonresident providers must register with Peruvian tax authorities from their first taxable sale, providing company and legal representative details. Registration does not establish a permanent establishment for income tax purposes. Invoices must state the transaction value.
- VAT invoicing: Invoices must include at a minimum the value of the transaction.
- VAT withholding made by financial intermediaries: The tax authorities can require financial intermediaries to withhold VAT if the provider fails to register, file returns, pay VAT, or submit required declarations. This withholding does not exempt the provider from VAT obligations or penalties.
Read a September 2024 report prepared by KPMG tax professionals in the United States and Peru