PERU Law and Practice Contributed by: Alvaro Echeandía, Alfred Kossuth Wieland, Pilar Santillán Meza and Rodrigo Varillas Cueto, Thorne, Echeandia & Lema Abogados
5. Tax Law 5.1 Taxes Applicable to Employees/
Withheld taxes will be credited against the annual income tax determined in the respective annual tax return, if applicable. Subordinated workers Given the employment relationship, the employ - er is responsible for withholding and paying the employee’s income tax to the Tax Administra - tion every month. Income tax is calculated for the whole year, divided into 14 parts equivalent to the tax applied to the payments the worker will receive in the year (12 monthly salary pay - ments plus two additional sums as additional compensation in July and December) and then deducted evenly from the monthly salary. For the fiscal year 2025, an employee will not be sub - ject to income tax if their annual salary does not exceed PEN37,450. In case the individual only gets employment income, no annual tax return needs to be filed. Income tax determination In order to determine the income tax basis for income from both independent and dependent services, a deduction equivalent to 7 UIT plus an additional deduction of 3 UIT (maximum) may be applied for certain expenses such as house rental expenses, medical expenses, restaurants and hotel expenses. In case of income from independent services, the taxpayer may also take a deduction of 20% from gross income. If the taxpayer obtains both types of income, the deductions will only be applied once. Social health insurance In Peru, the social contribution for health is man - aged by and should be paid to the government institution known as EsSalud , which provides health coverage, maternity leave benefits, work injury compensation, temporary disability and other related benefits.
Employers Income Tax
Both independent and subordinated workers pay income tax on income from independent services or from subordinated labour, respec - tively. The tax rate in both cases is the same and it will be applied progressively to the total income as the amount gets higher: • 8% for income under 5 UIT; • 14% for income in between 5 UIT and 20 UIT; • 17% for income in between 20 UIT and 35 UIT; • 20% for income in between 35 UIT and 45 UIT; and • 30% for income over 45 UIT. For reference, the updated UIT (taxation unit) in 2025 is PEN 5,350. Independent workers Since there is not an employment relationship, the independent worker is responsible for keep - ing a record of the perceived payments and to fulfil the tax obligation on their own, when appli - cable. In general, companies that pay for independ - ent workers’ services must withhold 8% of the payout if the collected amount is PEN1,500 or more. Independent workers who earn no more than PEN46,813 annually may request the Tax Administration to suspension the withholdings. Similar requests might be filed by company directors, trustees, company-appointed agents and individuals in similar positions, who earn no more than PEN37,450 annually.
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