Continuing our look at LATAM’s Fintech markets, where we’ve already looked at Brazil and Argentina, this time we zoom in for a closer look at Fintech in Peru.

Thanks to sweeping reforms in the last two decades, Peru has become one of the most developed regions in LATAM. With high growth, public debt below 25% and an average inflation rate expected to be between 2.2% and 2.5%, the Peruvian economy is on track for solid growth in the medium term. And, in that context, the Fintech sector has a lot to say in the country.

Peru has one of the fastest growing startup environments in LATAM. In September 2021, Fintechs in Peru numbered 171, a growth of 16% over 2020, and the sector shows year on year growth of 20%. From December 2019 to December 2020, the Central Bank of Peru reported virtual banking operations increased by over 88%.

The largest Fintech use in Peru is for payments, the three biggest companies being YAPE (8 million users), PLIN (4 million users), and BIM (1.3 million) – all mobile apps using messaging or QR codes to transfer payments.

Peru is actively encouraging tech sector development, particularly Fintech. In January 2021, Peru instigated a new the general regulatory framework that promotes the financing of MSMEs (micro, small and medium enterprises), entrepreneurships and start-ups.

To dovetail that new framework, new regulations from The Superintendency of Banking, Insurance, and Pension Fund Administrators (SBS) have been released. SBS 2429-2021 specifies that companies may perform any activity digitally if they are already authorized to do so, and further draft regulations from May 2021 defined criteria for setting up a financial regulatory sandbox, including mutual recognition of other international sandboxes.

171

Peru has one of the fastest growing startup environments in LATAM. In September 2021, Fintechs in Peru numbered 171, a growth of 16% over 2020, and the sector shows year on year growth of 20%.

The SBS, in collaboration with the Superintendency of Securities Market (SMV) and the Central Reserve Bank of Peru (BCRP), have been actively working on further bills to regulate Fintech activity, and the SMV is to be the entity in charge of Fintech regulation and supervision.

Regulatory framework

From a tax perspective, Fintech is regulated by:

  • General Sales Tax Law and its Regulations
  • Income Tax Law and its Regulations

Corporate income tax

Fintechs come under the Income Tax Law, qualifying their income as business income, and are taxed at the rate of 29.5% or 10% per year, depending on the tax regime (outlined here):

MYPE Tax Regime (RMT)

RMT is the regime created for micro and small enterprises that generate third-class income with the aim of promoting their growth.

  • Monthly tax: The income tax depends on the amount of income obtained (up to 300 UVT or S / 1,320,000 only pay 1% of the monthly net income, and if they exceed 300 UVT or S / 1,320,000 will be the one that results greater from applying the coefficient or 1.5%)
  • Annual tax: The RMT allows to deduct the expenses related to the business from the income, in this way the tax on the final profit of the year is paid with the following tranches:
    • Profit tranche: Up to 15 UVT or S/ 66,000, utility rate: 10%
    • Profit tranche: More than 15 UVT or S/ 66,000, tax on the utility: 29.5%

Exclusions:

  • Companies with annual net income exceeding 1700 UVT or S/ 7,480,000 (c. US$1,961,119.31) in the previous year.
  • Branches, agencies, or any other permanent establishment of companies incorporated abroad.

General regime

This regime is aimed at medium and large companies that generate third-class income. In this regime there are no income limits. The advantage of this regime is that companies can develop their business in any activity and without income limits.

  • Monthly tax: The income tax is determined by applying the coefficient or 1.5% on the monthly net income, whichever is greater
  • Annual tax: It allows to deduct the expenses related to the business from the income, in this way the tax on the final profit of the year is paid with a rate of 29.5%

Depreciation

Deductibles for wear and tear, or obsolescence of fixed assets. The maximum accepted tax rates depend on the type of asset, with data processing equipment set at 25%.

VAT

Rate of 18%.

Peru’s regulators are actively working to maximise on LATAM’s Fintech boom.

If you’d like more information on operating in Peru, or how Auxadi’s accounting, tax and payroll services can make your life easier, simply get in touch with our team in Lima.

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All information contained in this publication is up to date on 2022. This content has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this chart without obtaining specific professional advice.No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this content, and, to the extent permitted by law, AUXADI does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this chart or for any decision based on it.