The reduced VAT rates will apply to natural and legal persons engaged in business activities across any productive sector and subject to VAT.
The Peruvian Congress is reviewing Bill No. 11228/2024-CR, introduced on 19 May 2025, which proposes a temporary reduction of the standard VAT rate. This bill proposes the following changes to the VAT rate.
Progressive VAT rate changes
The current 18% VAT rate (comprising 16% national tax + 2% municipal tax) will be modified as follows:
| Year | Proposed VAT Rate |
| 2026 | 15% |
| 2027 | 16% |
| 2028-2030 | 17% |
The reduced VAT rates will apply to natural and legal persons engaged in business activities across any productive sector and subject to VAT.
However, entities forming part of an economic group that does not collectively meet the eligibility criteria, or those with financial ties to other national or foreign companies or groups, will be excluded.
To offset the VAT reduction, an additional 1% income tax will be imposed on affected companies for the duration of the reduced VAT rate period.
