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Countries › Peru › Guide › 6. Taxes › IGV in Peru: the 18 percent value added tax, the 2026 to 2029 shift to the municipal tax, input credit, foreign services, exports and refunds

IGV in Peru: the 18 percent value added tax, the 2026 to 2029 shift to the municipal tax, input credit, foreign services, exports and refunds

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

Peru's value added tax is the Impuesto General a las Ventas (IGV) plus the Impuesto de Promoción Municipal (IPM), charged together at 18 percent on sales of goods, services provided or used in Peru, construction, first sales of buildings and imports. Ley 32387 keeps the 18 percent total but shifts half a point a year from IGV to IPM: 15.5 plus 2.5 in 2026, reaching 14 plus 4 in 2029. Businesses deduct IGV on purchases if it is shown on a valid invoice and the purchase is deductible for income tax; exports are zero rated with a refundable balance, and IGV on services from abroad is self assessed and creditable only once paid.

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

Combined IGV plus IPM rate18 %DL 821 art. 17 and DL 776 art. 76, as amended by Ley 32387, as of 2026-10-28 · in force
IGV rate for 2026 (excluding IPM)15.5 %Ley 32387 art. 2, as of 2026-10-28 · in force
Municipal promotion tax (IPM) rate for 20262.5 %Ley 32387 art. 2, as of 2026-10-28 · in force
IGV rate for 2027 (IPM 3 percent)15 %Ley 32387 art. 2, as of 2026-10-28 · in force
IGV rate from 2029 (IPM 4 percent)14 %Ley 32387 art. 2, as of 2026-10-28 · in force
Peruvian user self assesses IGV on services used from non domiciled providersyes booleanLIGV art. 9.1 c) and art. 21, as of 2026-10-28 · in force
IGV base on importsCustoms value plus duties and import taxes (excluding IGV) textLIGV art. 13 e), as of 2026-10-28 · in force
Exports of goods and servicesNot subject to IGV; input IGV refundable as exporter's balance textLIGV art. 33 to 35, as of 2026-10-28 · in force

The rule

1. IGV applies to the sale of movable goods in Peru, services provided or used in Peru, construction contracts, the first sale of buildings by their builders (and later sales by related companies) and imports of goods.Texto Único Ordenado de la Ley del IGV e ISC (Decreto Supremo Nº 055-99-EF), Art. 1 letters a) to e), 1999-04-15 official text · verified 2026-10-28
2. A service is provided in Peru when the provider is domiciled in Peru for income tax purposes, wherever the contract is signed or paid. A service provided by a non domiciled party is used in Peru when it is consumed or employed in Peruvian territory, regardless of where it is paid or contracted; the Peruvian user is then the taxpayer.Texto Único Ordenado de la Ley del IGV e ISC (Decreto Supremo Nº 055-99-EF), as amended by Decreto Legislativo Nº 950, Art. 3 letter c) numeral 1 and art. 9.1 letter c), 2004-02-03 official text · verified 2026-10-28
3. The IGV rate is set at 14 percent, applied progressively as the IPM rises by 0.5 points each year from 1 January 2026 until it is 2 points higher. Since the IPM was 2 percent, the combined rate stays at 18 percent: IGV 15.5 and IPM 2.5 percent in 2026, 15 and 3 in 2027, 14.5 and 3.5 in 2028, and 14 and 4 from 2029.Ley Nº 32387, amending art. 17 of the Texto Único Ordenado de la Ley del IGV e ISC (Decreto Supremo Nº 055-99-EF) and art. 76 of the Ley de Tributación Municipal, Art. 2; third complementary amending provision; fourth final complementary provision, 2025-06-16 official text · verified 2026-10-28 · changed: Ley 32387 (16 June 2025) moves 0.5 points a year of the 18 percent from IGV to the municipal IPM from 1 January 2026 to 2029; the total stays at 18 percent.
4. On imports the base is the customs value plus the duties and taxes on the import, except IGV itself. For sales of goods the base is the sale value, and for services the total consideration.Texto Único Ordenado de la Ley del IGV e ISC (Decreto Supremo Nº 055-99-EF), letter e) as substituted by Ley Nº 30264, Art. 13 letters a), b) and e), 2014-11-16 official text · verified 2026-10-28
5. Input credit is the IGV shown separately on the invoice for purchases of goods, services and construction, or paid on imports or on services used from non domiciled providers. It is available only if the purchase is deductible as a cost or expense for income tax and is used for operations subject to IGV. For services from non domiciled providers, the credit can be taken only once the IGV has been paid. An excess of credit over output tax in a month carries forward to later months until used.Texto Único Ordenado de la Ley del IGV e ISC (Decreto Supremo Nº 055-99-EF), art. 18 as amended by Decreto Legislativo Nº 950, Art. 18, art. 21 and art. 25, 2004-02-03 official text · verified 2026-10-28
6. Businesses file one monthly return for each calendar month, showing taxable and exempt operations, output tax, input credit and IGV withheld or collected, and pay the resulting tax within the following month on the SUNAT schedule. Exporters must also file, even if the goods have not yet shipped.Texto Único Ordenado de la Ley del IGV e ISC (Decreto Supremo Nº 055-99-EF), art. 29 as substituted by Decreto Legislativo Nº 950, Art. 29 and art. 30, 2004-02-03 official text · verified 2026-10-28
7. Exports of goods and services are not subject to IGV. IGV paid on purchases and imports used for exports gives the exporter a balance in its favour, applied first against its own IGV, then against income tax advances and annual payments, then against other Treasury taxes; any remainder is refunded under the regulation.Texto Único Ordenado de la Ley del IGV e ISC (Decreto Supremo Nº 055-99-EF), art. 35 as amended by Ley Nº 27064, Art. 33 first paragraph, art. 34 and art. 35, 1999-02-10 official text · verified 2026-10-28
YearIGVIPMTotal
202516%2%18%
202615.5%2.5%18%
202715%3%18%
202814.5%3.5%18%
2029 onward14%4%18%

IGV and IPM rates under Ley 32387 (total stays at 18 percent)

Worked example

  • In a month of 2026 a Peruvian distributor sells goods for S/ 100,000 plus 18 percent, charging S/ 18,000 (US$5,214): S/ 15,500 of IGV and S/ 2,500 of IPM.
  • It bought stock for S/ 60,000 plus S/ 10,800 of IGV and IPM shown on valid invoices, so it pays S/ 7,200 (US$2,086) for the month.
  • The same month it uses consulting from a US firm for S/ 50,000: it self assesses S/ 9,000 (US$2,607) and can credit it only once paid.

Step by step

  1. Register for IGV when you obtain the RUC and set up electronic invoicing, since credit depends on a valid invoice.
  2. Each month, total output IGV and IPM, deduct qualifying input credit, add self assessed IGV on services used from abroad, and file and pay on the SUNAT schedule.
  3. Pay the self assessed IGV on foreign services promptly so the credit can be used.
  4. Exporters: keep shipping documents and apply the exporter's balance against IGV, then income tax, then request a refund for the rest.

Common traps

  • Input IGV on purchases that are not deductible for income tax (for example, expenses lacking causality) is not creditable either.
  • Self assessed IGV on services from abroad is a cash cost until paid; it cannot be credited in advance.
  • The IGV rate moves every 1 January until 2029; invoicing systems and price lists must split IGV and IPM correctly even though the total stays at 18 percent.
  • Services count as exported only if they meet all the conditions in art. 33; failing one makes them taxable at 18 percent.

Sources

Related pages

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

← Capital gains tax in Peru for foreign investors: selling Peruvian shares directly or indirectly, listed securities and real estateTransfer pricing in Peru: scope, methods, the Local, Master and Country by Country reports, advance pricing agreements and longer dispute deadlines →

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