Countries › Peru › Guide › 6. Taxes › Interest deduction limits in Peru: the 30 percent of EBITDA cap, its exemptions, carryforward and related party interest

Interest deduction limits in Peru: the 30 percent of EBITDA cap, its exemptions, carryforward and related party interest

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

Since 2021 Peru limits net interest expense to 30 percent of the prior year's tax EBITDA, replacing the old 3 to 1 debt to equity test. Disallowed interest carries forward for four years under the same cap, and the rule does not apply to banks, insurers and registered factoring companies, taxpayers with revenue up to 2,500 UIT (S/ 13,750,000 in 2026) or certain public private partnership projects. Interest paid to a related foreign lender also bears 30 percent withholding, so intercompany debt is costly on both sides.

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. Conversions are for orientation only.

Key facts

Net interest deduction cap	30 % of prior year tax EBITDALIR art. 37 a) (DL 1424), as of 2026-10-28 · in force
Carryforward of disallowed net interest	4 yearsLIR art. 37 a) 1, as of 2026-10-28 · in force
Revenue up to which the cap does not apply	2500 UITLIR art. 37 a) 2 b), as of 2026-10-28 · in force
Withholding on interest paid to related foreign lenders	30 %LIR art. 56 j), as of 2026-10-28 · in force

The rule

1. Interest and borrowing costs are deductible only if the debt was taken on to acquire goods or services linked to producing taxable income in Peru or maintaining its source. Net interest (interest expense minus interest income) is not deductible above 30 percent of the prior year's EBITDA, defined as net income after loss offsets plus net interest, depreciation and amortization. Disallowed net interest can be added to the next four years, subject to the same cap.
Example: Prior year EBITDA of S/ 10,000,000 gives a cap of S/ 3,000,000; net interest of S/ 4,000,000 leaves S/ 1,000,000 disallowed and carried forward. / Cap US$869,061; US$289,687 carried forward.Texto Único Ordenado de la Ley del Impuesto a la Renta (Decreto Supremo Nº 179-2004-EF), letter a) as substituted by Decreto Legislativo Nº 1424 (in force 1 January 2021), Art. 37 letter a) numeral 1, 2018-09-13 official text · verified 2026-10-28 · changed: From 1 January 2021 the 30 percent of EBITDA cap replaced the former limit of three times prior year net equity.

2. The cap does not apply to banking, insurance and other financial system companies under art. 16 of Ley 26702, and factoring companies registered with the SBS; to taxpayers whose net revenue for the year is up to 2,500 UIT; and to taxpayers developing public infrastructure, public services, applied research or technological innovation under public private partnerships (Decreto Legislativo Nº 1224). Interest on Proyectos en Activos financing and on bonds placed by primary public offering in Peru with at least five unrelated investors counts toward the cap but stays deductible even above it.Texto Único Ordenado de la Ley del Impuesto a la Renta (Decreto Supremo Nº 179-2004-EF), numeral 2 as amended by Decreto de Urgencia Nº 013-2020, Art. 37 letter a) numeral 2 letters a) to e), 2020-01-23 official text · verified 2026-10-28

3. Deductible interest is further reduced by exempt and non taxable interest income, except interest on securities acquired under a legal requirement or Central Bank rules, or yielding no more than 50 percent of the average market lending rate in soles. Interest on tax installment plans granted under the Tax Code is deductible and is not counted for the cap.Texto Único Ordenado de la Ley del Impuesto a la Renta (Decreto Supremo Nº 179-2004-EF), Art. 37 letter a) numerals 3 and 5, 2018-09-13 official text · verified 2026-10-28

4. Companies incorporated or starting activities during the year use that same year's EBITDA for the cap.Decreto Supremo Nº 432-2020-EF, third final complementary provision, as noted in the SUNAT consolidated text, Third final complementary provision, 2020-12-31 official text · verified 2026-10-28

5. Interest paid to a related foreign lender, or through a lender used to disguise a related party loan, is withheld at 30 percent instead of 4.99 percent.Texto Único Ordenado de la Ley del Impuesto a la Renta (Decreto Supremo Nº 179-2004-EF), Art. 56 letter j), 2010-12-31 official text · verified 2026-10-28

Situation	Treatment	Rule
Net interest up to 30% of prior year EBITDA	Deductible	LIR art. 37 a) 1
Net interest above the cap	Carried forward up to 4 years, same cap	LIR art. 37 a) 1
Banks, insurers, registered factoring companies	Cap does not apply	LIR art. 37 a) 2 a)
Revenue up to 2,500 UIT (S/ 13,750,000)	Cap does not apply	LIR art. 37 a) 2 b)
Public private partnership projects	Cap does not apply	LIR art. 37 a) 2 c)
Proyectos en Activos debt and qualifying public bonds	Counted but deductible above the cap	LIR art. 37 a) 2 d) and e)

Interest deductibility in Peru

Worked example

A Peruvian mining services company had 2025 tax EBITDA of S/ 10,000,000 (US$2,896,871). In 2026 its net interest is S/ 4,000,000 (US$1,158,749).
It deducts S/ 3,000,000 (US$869,061) and carries S/ 1,000,000 (US$289,687) to 2027 through 2030, each year subject to the 30 percent cap. The tax cost of the disallowance in 2026 is S/ 295,000 (US$85,458) at 29.5 percent.
If the lender is its foreign parent, the interest paid also bears 30 percent withholding rather than 4.99 percent.

Step by step

Compute the prior year tax EBITDA from the annual return before setting the year's financing plan.
Net interest income against interest expense and test the result against 30 percent of that EBITDA.
Track disallowed interest by year so it is used within the four year window.
Check whether an exemption applies (financial sector, revenue up to 2,500 UIT, PPP projects, qualifying public bonds).
Price intercompany loans at arm's length and budget for 30 percent withholding on related party interest.

Common traps

The cap uses the prior year's EBITDA, so a company growing fast or recovering from a loss year may face a low cap.
Disallowed interest expires after four years; it is not carried indefinitely.
Exempt interest income reduces deductible interest even before the cap.
Related party loans face both the cap and 30 percent withholding, plus transfer pricing scrutiny of the rate.

Sources

Related: Peru country profile · live dashboard · central bank and release calendar · our posts on X · where Argentina is involved, see The Argentine Thread guide

← Transfer pricing in Peru: scope, methods, the Local, Master and Country by Country reports, advance pricing agreements and longer dispute deadlinesTax loss carryforward in Peru: the four year system, the unlimited 50 percent system, and how to choose →

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