Peru has yet to impost its Value Added Tax on digital or electronic services provided by non-resident sellers or marketplaces. B2B domestic supplies of e-services are already liable to VAT. B2B supplies from abroad to resident businesses may be zero-rated under the reverse charge mechanism. It is now considering a payment provider Withholding VAT regime.
Bill to introduce B2C digital services VAT
At the end of 2020, a Bill was put forward in Congress to introduce the obligation to charge VAT by non-residents on B2C transactions but there has been no progress since. Peru is looking to follow the examples of Mexico, Columbia,Paraguay and Chile.
This envisages a Withholding VAT putting the onus on the payment provider to act as withholding agent. An assumption made in the bill is that non-domiciled providers already incorporate VAT in the prices they charge. Netflix, for example, indicates that taxes may be charged on top of the advertised subscription rates, which range from 24.9 to 44.9 soles a month (around US$6.90 to US$12.50).