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Peru Import Regs.: Tariffs & Taxes

Discussion of Peru's standards and comprehensive import regulations on warrantees/guarantees, used vehicles, temporary entry, prohibitions, licenses, and more.

Peru Import Regs.: Tariffs & Taxes

Postby bridgat » Tue Nov 18, 2008 6:57 am

On October 13, 2007, the GOP reduced tariff rates on over 56% of its tariff classifications and now maintains a 4 tier tariff rate structure of 0, 9, 17, 20%, mostly affecting some consumer, agricultural, and locally produced capital goods. These changes should be effective November 1, 2007.

Since 2004, Peru has applied a customs clearance charge on imports. The charge is paid "for processing the Single Customs Declaration" under the outright importation and customs warehouse regimes.

Peru applies a tariff surcharge (called the "additional tariff surtax" and subsequently the "additional tariff duty") of 5 per cent to 392 ten-digit tariff lines. The products subject to this measure are classified in Chapters 1-24 of the HS, except for dextrins and other modified starches, classified in HS Chapter 35. The surtaxes have been in force since 1997, although the amount and the coverage have often changed.

Surtaxes are applied to the c.i.f. value of imports. Goods imported under the preferential agreements signed by Peru are also subject to surtaxes. Under these agreements, the preferential margins are applied to the sum of the basic rates and the additional surtax rates.

Most imports are also subject to an 19% value added type tax ("General Sales Tax"), which is assessed on CIF value plus duty. There are a series products that are exempt from this tax: many raw agricultural products; HS chapter 490110, 490191, and other educational materials; powdered gold for use in money and other forms of raw gold; and certain HS chapter 8703 vehicles. The details of the exemptions were published in Law 27614 of December 12, 2001.

The selective consumption tax (ISC) is levied on the sale in Peru at producer level and on the importation of fuels derived from petroleum, Pisco, beer, and cigarettes made from dark and bright tobacco. It is also levied on the sale in Peru by the producer or importer of vehicles, water and other non-alcoholic beverages, wine, vermouth, cider and other fermented beverages, undenatured ethyl alcohol, spirituous beverages, and cigars and cigarritos. These goods represent about 1.4 per cent of the tariff universe. Gambling and betting are also subject to ISC.

The tax base for beer and cigarettes made from dark and bright tobacco is the retail selling price suggested by the importer or the producer multiplied by 0.84. The retail selling price includes all the taxes on importation, production and sale. For other goods subject to ISC at ad valorem rates, the tax base is the customs value plus import duties (imported products) or the selling price, not including IGV (domestic products).

Pisco is subject to ISC at a specific rate of S./ 1.50 per litre, while other alcoholic beverages such as wine from grapes, fermented beverages, brandy, whisky, rum and gin, are subject to ISC at an ad valorem rate of 20 per cent. Due to this difference in rates, the ISC on Pisco is less than the ISC on other alcoholic beverages if the price of the latter exceeds S./ 7.50 per litre (approximately US$2.36 per litre).

Information Technology & Software Products

Tariffs for software will only be paid on the device (i.e. CD-Rom itself or floppy disk) carrying the software and not the value of the software. This is the case only if the foreign supplier provides an invoice differentiating both amounts. For example, if an invoice explicitly includes a value of $10 for the CD and $500,000 for the software, import tariffs will only be paid (12% ad valorem) for the $10. This is only the case in software that runs as a non-operating program.

Peruvian customs dictates that certain software needs to be treated separately. This is the case with operating software delivered with a computer. Since the software is integral to the initial operation of the computer, by Peruvian decree it forms part of the equipment, and thus must be treated as a part of the equipment, rather than software. In this case, tariffs should be paid based upon total device value (including software value, rather than medium value), regardless of whether they enter the market physically or via an Internet download.

In the case of updates, whose amount has been included in the original invoice and import tariffs have been paid already, no additional tariffs need to be paid considering that the updates are mentioned in the original invoice and conform with the delivery dates. Updates that were not included in the original invoice and are charged separately need to pay import tariffs over the invoice amount. It is recommended that the first original invoice mention the value of all updates and the delivery dates.

If the property rights or license are transferred to the importer through a temporary transfer agreement they are considered royalties and for such the importer needs to withhold 30% income tax plus any amount due for royalty payments.

If the property right or license has been granted for lifetime use, it would not be considered subject to royalty payments, but as a part of the original purchase price.

Software to be installed in processing data equipment, downloaded from the Internet or any other device, is not required to pay any duties as far as the invoice differs from the tangibles and the intangibles. Software running the computer is installed in the computer and therefore is part of the computer. Even if it is downloaded from the Internet, duties are legally required to be paid.
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