Countries › Peru › Guide › 12. Sectors › Agriculture and agribusiness in Peru: the Ley 32434 regime, the 15 percent income tax rate, small producer rules, irrigation depreciation and land ownership

Agriculture and agribusiness in Peru: the Ley 32434 regime, the 15 percent income tax rate, small producer rules, irrigation depreciation and land ownership

Last verified: 2026-10-28 · Status: Changing

Ley 32434, published on 10 September 2025, set a new promotional regime for farming, livestock and agroindustry, with its income tax and VAT rules in force from 1 January 2026. Agrarian companies pay a reduced income tax rate (15 percent, with 0.8 percent monthly advances) instead of the general 29.5 percent; a labeled secondary source reports the 15 percent rate for 2026 to 2035. Small producers registered in the MIDAGRI producer roll pay no income tax up to 30 UIT of net income and a final 1.5 percent on the excess up to 150 UIT. Companies may depreciate irrigation works at 20 percent a year and deduct an extra 25 percent of purchases from registered small producers, both for 2026 to 2035. Nationals and foreigners have free access to farmland with no size limits, except the constitutional rule for border zones. Agroindustry in Lima and Callao and wheat, tobacco, oilseeds, oils and beer are outside the regime.

USD figures use S/ 3.452 per US dollar, the banking system selling rate published by the Superintendencia de Banca, Seguros y AFP for 27 October 2026, from the Banco Central de Reserva del Perú statistics series PD04640PD. UIT based amounts use the 2026 UIT of S/ 5,500 set by Decreto Supremo Nº 301-2025-EF, as cited in SUNAT Resolución de Superintendencia Nº 000016-2026/SUNAT. Conversions are for orientation only.

Key facts

Income tax rate for agrarian companies under Ley 32434 (2026 to 2035 per KPMG, labeled secondary)	15 %Ley 32434 art. 12, as of 2026-10-28 · in force
Monthly advance payment rate for agrarian companies at the 15% rate	0.8 %Ley 32434 art. 12.2, as of 2026-10-28 · in force
Small producer net income exempt from income tax	30 UITLey 32434 art. 11.1 a), as of 2026-10-28 · in force
Final income tax on small producer net income between 30 and 150 UIT	1.5 %Ley 32434 art. 11.1 b), as of 2026-10-28 · in force
Annual depreciation rate for irrigation works built 2026 to 2035	20 %Ley 32434 art. 13, as of 2026-10-28 · in force
Additional deduction on purchases from registered small producers	25 %Ley 32434 art. 14, as of 2026-10-28 · in force

The rule

1. The regime covers small agrarian producers and agrarian companies that mainly carry out crop growing or livestock breeding, and those that directly and mainly carry out agroindustry using mainly agricultural products outside Metropolitan Lima and Callao. Activities count as the main ones when net income from other activities does not exceed 20 percent of total annual net income. Small producers are individuals, undivided estates or couples registered in the MIDAGRI producer roll (Padrón) whose net income does not exceed 150 UIT a year; agrarian companies are individuals with business income above 150 UIT and legal entities. Agroindustry related to wheat, tobacco, oilseeds, oils and beer is excluded, and the covered agroindustrial activities are listed by supreme decree. Joint ventures and consortia with independent accounting cannot include small producers or their associations.
Cost to do it: No fee in the law to opt in. Small producer ceiling: 150 UIT, S/ 825,000 (about US$238,992) in 2026.
Example: An avocado grower and packer in La Libertad qualifies; the same packing plant located in Lima would not qualify for its agroindustrial income. / A US$50 million blueberry exporter qualifies as long as non farming income stays at or below 20 percent of net income.Ley Nº 32434, Ley que promueve la transformación productiva, competitiva y sostenible del sector agrario (El Peruano 10 September 2025), Art. 3 and 4, 2025-09-10 official text · verified 2026-10-28

2. The State guarantees free access to ownership of land to every person, national or foreign, who qualifies as a small producer or agrarian company, subject for foreigners to article 71 of the Constitution in border zones. Rights over agrarian land are not subject to limits based on the size of the property or changes of ownership. Legal stability agreements signed by agrarian companies under Decretos Legislativos 662 and 757 stabilise income tax at the rate in art. 12.1 plus two percentage points.
Cost to do it: Land purchase costs (transfer tax, notary and registry fees) follow the general real estate rules; see the real estate section.
Example: A Chilean agribusiness group can buy 2,000 hectares of irrigated land in Piura with no size ceiling, but not within 50 km of the border without the constitutional authorisation. / A stability agreement signed by an agrarian company locks in the reduced rate plus 2 points, not the general rate.Ley Nº 32434, Ley que promueve la transformación productiva, competitiva y sostenible del sector agrario (El Peruano 10 September 2025), Art. 5.1, 5.2 and 5.5, 2025-09-10 official text · verified 2026-10-28

3. Small producers registered in the Padrón are not subject to income tax if their net income for the year is up to 30 UIT. Above 30 UIT and up to 150 UIT, they pay 1.5 percent on the excess over 30 UIT, as a final tax. Their associations and agrarian companies act as withholding agents; companies buying directly from small producers withhold 1.5 percent of payments. Above 150 UIT, the producer files and pays under the agrarian company rules. The UIT of the year of the income applies.
Cost to do it: Final tax of 1.5 percent on net income between 30 UIT (S/ 165,000) and 150 UIT (S/ 825,000) in 2026.
Example: A coffee grower with net income of S/ 550,000 (100 UIT) pays 1.5 percent on S/ 385,000, that is S/ 5,775, final. / About US$1,673 of tax on about US$159,328 of net income.Ley Nº 32434, Ley que promueve la transformación productiva, competitiva y sostenible del sector agrario (El Peruano 10 September 2025), Art. 11, 2025-09-10 official text · verified 2026-10-28

4. Agrarian companies determine income tax under the Income Tax Law but apply the reduced rates in the table of art. 12.1. Companies taxed at the 15 percent rate and required to make advances under art. 85 b) of the Income Tax Law pay 0.8 percent of monthly net income, against 1.5 percent for those on the general rate. They may also deduct costs supported by receipts from taxpayers in the simplified NRUS regime, up to 10 percent of costs backed by valid invoices in the purchase register and no more than 200 UIT a year. The rate table in art. 12.1 is reproduced as an image that did not render in the official Congress copy; KPMG (secondary, labeled) reports 15 percent for 2026 to 2035 and the general rate from 2036.
Cost to do it: No fee; SUNAT forms 3412 (agrarian business income) and 3032 (withholdings) were adapted by RS 000059-2026/SUNAT.
Example: An agroexporter with taxable income of S/ 20,000,000 pays S/ 3,000,000 at 15 percent instead of S/ 5,900,000 at 29.5 percent, a saving of S/ 2,900,000. / About US$869,061 instead of US$1,709,154, a saving of about US$840,093 a year.Ley Nº 32434, Ley que promueve la transformación productiva, competitiva y sostenible del sector agrario (El Peruano 10 September 2025), Art. 12 and first final provision, 2025-09-10 official text · verified 2026-10-28 · changed: Ley 32434 income tax and IGV rules took effect on 1 January 2026; the rest of the law on 11 September 2025 (first final provision).

5. For income tax, agrarian companies may depreciate at 20 percent a year investments in hydraulic infrastructure and irrigation works used to produce taxable income, if acquired or built in 2026 to 2035. This does not apply to investments covered at publication by legal stability agreements or other contracts with tax stability clauses, unless they are waived.
Cost to do it: No fee.
Example: A S/ 10,000,000 drip irrigation system built in 2026 can be depreciated at S/ 2,000,000 a year over five years. / About US$579,374 a year of deductions for about US$2,896,871 of irrigation works.Ley Nº 32434, Ley que promueve la transformación productiva, competitiva y sostenible del sector agrario (El Peruano 10 September 2025), Art. 13, 2025-09-10 official text · verified 2026-10-28

6. For 2026 to 2035, agrarian companies may deduct an additional 25 percent of the value of products bought from small producers registered in the Padrón, directly or through registered associations or cooperatives. The producer must be registered at the time of purchase and throughout the year, and the additional deduction cannot exceed 10 percent of the amounts backed by valid invoices recorded in the purchase register.
Cost to do it: No fee; the benefit depends on suppliers being registered.
Example: Buying S/ 4,000,000 of mangoes from registered small producers gives an extra deduction of S/ 1,000,000, subject to the 10 percent of documented purchases cap. / About US$289,687 of extra deduction on about US$1,158,749 of purchases.Ley Nº 32434, Ley que promueve la transformación productiva, competitiva y sostenible del sector agrario (El Peruano 10 September 2025), Art. 14, 2025-09-10 official text · verified 2026-10-28

7. Beneficiaries that produce and sell in Peru agricultural goods listed in Appendix I of the IGV law, which are exempt from IGV, are entitled to a tax refund equal to the IGV on their purchases of goods, services and construction contracts and on their imports, provided the IGV was not used as a cost for income tax. Those that had renounced the exemption may opt back in within three months of the refund rule taking effect.
Cost to do it: No fee; the refund procedure is set by supreme decree.
Example: A potato grower selling exempt produce in Peru can recover the IGV it paid on fertiliser and machinery instead of carrying it as a cost. / For a grower paying S/ 345,200 (about US$100,000) of IGV on inputs, the refund turns that cost into recoverable cash.Ley Nº 32434, Ley que promueve la transformación productiva, competitiva y sostenible del sector agrario (El Peruano 10 September 2025), Art. 15 and 16, 2025-09-10 official text · verified 2026-10-28

Annual net income	Tax	Example
Up to 30 UIT (S/ 165,000)	Not subject	S/ 150,000 pays S/ 0
Above 30 and up to 150 UIT (S/ 825,000)	1.5% of the excess over 30 UIT, final	S/ 550,000 pays S/ 5,775
Above 150 UIT	Agrarian company rules (art. 12)	Files and pays directly

Income tax on small producers registered in the Padrón, 2026 (UIT S/ 5,500; Ley 32434 art. 11)

Worked example

An agroexporter with S/ 20,000,000 of taxable income (about US$5,793,743) pays S/ 3,000,000 instead of S/ 5,900,000. If it also bought S/ 4,000,000 from registered small producers, it can deduct an extra S/ 1,000,000 within the 10 percent of documented purchases cap, and depreciate 2026 irrigation works at 20 percent a year.

Step by step

Check eligibility: main activity (other income at most 20 percent), location of agroindustry outside Lima and Callao, and excluded crops (art. 4).
Use SUNAT forms 3412 and 3032 as adapted by RS 000059-2026/SUNAT for monthly advances and withholdings.
Ask suppliers to register in the MIDAGRI Padrón before buying, to withhold 1.5 percent correctly and claim the 25 percent extra deduction (art. 11 and 14).
Plan irrigation capex in 2026 to 2035 to use 20 percent depreciation (art. 13).
If selling Appendix I exempt goods, apply for the IGV refund under the regulation (art. 15).

Common traps

The art. 12.1 rate table did not render in the official Congress copy; confirm the rate and period against the gazette or the regulation (DS 015-2026-EF) before relying on them.
Agroindustry located in Metropolitan Lima or Callao and activities related to wheat, tobacco, oilseeds, oils and beer are outside the regime (art. 4).
The 25 percent extra deduction is lost for purchases from producers not registered in the Padrón at the time of purchase (art. 14.2 a).

Sources

← Telecommunications in Peru: the single concession, 20 year terms, spectrum, the 0.5 percent operating charge and the 1 percent FITEL contributionForestry in Peru: plantations without permits, timber concessions of up to 40 years, land use change limits, the 30 percent forest reserve and the 2024 zoning changes →

Get rule changes weekly

Free. One email a week from The LatAm Thread.

One more step after you press the button: we take you to Substack, where your email is already filled in. Confirm there to start. No spam, unsubscribe anytime, we never share your address. By subscribing you agree to the privacy policy.