You probably already know that one of the New Seven Wonders of the World can be found in Peru. Also, Peru is home to the world's largest flying bird, the highest navigable lake, and 90 different microclimates. But did you know that Peru has one of the best-performing economies in the region? If you are interested in starting your own business as a self-employed worker, we are going to make sure you understand the steps in setting up as one.
Disclaimer: Be aware that this article is not a substitute for legal advice. Please always check official websites or seek legal advice before you take action.
Registro Único de Contribuyentes: The registration process in Peru
Any person residing in Peru, who starts economic activities, must get accredited as a self-employed or independent worker with Superintendencia Nacional de Aduanas y de Administración Tributaria (SUNAT for short), the organization responsible for customs and taxation in Peru. If you want to register as a self-employed, you should complete the Registro Único de Contribuyentes (RUC) to obtain a registration number of taxpayers. You need a taxpayer number whether you are a natural or a legal person. The RUC number has eleven digits containing information such as the person's name, company name, tax address, and main business activity (as well as secondary activities, if applicable).
To obtain the RUC, you will have to go to any Taxpayer Services office.
How to obtain taxpayer number in Peru
If the business address is the same as in your ID, you will only need to present your ID. If the address is different, you must enclose a document that reflects your business address.
If you are a foreigner residing in Peru, you should enclose an immigration card, an ID card issued by the Ministry of Foreign Affairs, a passport, and any other document that may be considered relevant.
Taxpayer number online registration process
Peru has an online system that only allows resident individuals, with or without a business, to obtain their RUC in minutes.
To obtain your RUC online, head over to the SUNAT website. The next step is to carry out the biometric fingerprint verification, follow the simple instructions and upload the required documents. Right now, this service is available 24 hours a day as a measure to prevent contagion from the Covid-19 pandemic.
VAT
As an independent contractor in Peru, you are subject to Value Added Tax (VAT). You must pay this tax on a monthly basis, and it depends on the services done during the previous month. The tax rate is 16% plus an additional 2% of Promotion of the Municipality to be a total of 18% by IGV.
Income tax
Income tax is collected once a year, and it depends on all earnings received during a year. In the case of independent or self-employed workers, tax is classified as "fourth category income" since the services and products are sold without any dependency relationship. As an independent contractor, you will have to make retention of 8% of the total amount of the value of your service, unless the value of the same does not exceed the amount of 1500 Soles, in which case the retention will not be made.
Income tax brackets are as follows:
- Up to 5 UIT - 8%
- 6 to 20 UIT - 14%
- 20 to 35 UIT - 17%
- 36 to 45 UIT - 20%
- Above 45 UIT - 30%.
UIT stands for “Unidad Impositiva Tributaria”
