Peru offers a “Rentista Visa” for foreign retirees who wish to reside in the country. One common question among retirees is whether they are subject to Peruvian taxes on their income, particularly their foreign pension income. This answer provides a detailed overview of the tax obligations for retirement visa holders in Peru, citing relevant Peruvian tax laws and authoritative sources.
1. Tax Residency in Peru
a. Definition of Tax Residency
- Domiciled Individuals: According to the Peruvian Income Tax Law (Ley del Impuesto a la Renta), an individual is considered a tax resident (domiciled) if they reside in Peru for more than 183 days within a 12-month period. (Article 7 of the Income Tax Law)
- Non-Domiciled Individuals: Those who spend less than 183 days are considered non-residents (non-domiciled).
b. Implications of Tax Residency
- Domiciled Individuals: Subject to Peruvian income tax on their worldwide income.
- Non-Domiciled Individuals: Taxed only on income from Peruvian sources.
2. Taxation of Foreign Pension Income
a. Exemption for Foreign Pensions
- Legal Provision: Under Article 18(e) of the Peruvian Income Tax Law, pensions received from foreign sources by domiciled individuals are exempt from income tax in Peru.
“Están exoneradas del Impuesto: … Las pensiones provenientes del extranjero que perciban las personas naturales domiciliadas en el país.”
(Translation: “Exempt from tax are: … Pensions from abroad received by individuals domiciled in the country.”)
Authoritative Source: Peruvian Income Tax Law – Article 18(e)
b. Practical Implication
- Retirement Visa Holders: If you hold a Rentista Visa and become a tax resident, your foreign pension income is not subject to Peruvian income tax.
3. Taxation of Other Income
a. Peruvian-Source Income
- Taxable Income: Any income generated from Peruvian sources, such as rental income from property in Peru, interest from Peruvian banks, or employment income, is subject to Peruvian income tax.
- Tax Rates: Progressive tax rates apply to domiciled individuals, ranging from 8% to 30% depending on the income bracket. (Articles 53 and 54 of the Income Tax Law)
b. Foreign Income Other Than Pensions
- Taxable: Other foreign income (e.g., dividends, interest, capital gains) may be taxable for domiciled individuals.
- Foreign Tax Credit: Peru allows for a foreign tax credit to avoid double taxation on income taxed abroad. (Article 81 of the Income Tax Law)
4. Obligations for Tax Residents
a. Registration with SUNAT
- SUNAT (Superintendencia Nacional de Aduanas y de Administración Tributaria): The Peruvian tax authority.
- Requirement: Tax residents must register with SUNAT and obtain a RUC (Registro Único de Contribuyentes) number.
Authoritative Source: SUNAT Official Website
b. Annual Tax Declarations
- Filing Requirement: Domiciled individuals with taxable income must file an annual income tax return (Declaración Jurada Anual del Impuesto a la Renta).
- Deadline: Usually in March of the following year, with specific dates announced annually by SUNAT.
5. Double Taxation Agreements (DTAs)
a. Existing DTAs
- Purpose: DTAs prevent double taxation and provide tax relief for individuals who may be taxed in both Peru and their home country.
- Peru’s DTAs: As of October 2023, Peru has DTAs with countries like Chile, Canada, Brazil, Portugal, Switzerland, Mexico, and South Korea.
Authoritative Source: SUNAT – Double Taxation Agreements
b. Applicability
- Retirees from DTA Countries: May benefit from provisions that further clarify tax obligations.
- Recommendation: Consult the specific DTA to understand the implications.
6. Practical Steps for Retirees
a. Consult a Tax Professional
- Importance: Tax laws can be complex and subject to change. Personalized advice ensures compliance.
b. Monitor Changes in Tax Laws
- Updates: Stay informed about any legislative changes that may affect tax obligations.
Authoritative Source: SUNAT Legislative Updates
Conclusion
Retirees holding a Rentista Visa in Peru are not taxed on their foreign pension income, even if they are considered tax residents (domiciled individuals). However, they are subject to taxation on Peruvian-source income and possibly other foreign income. It’s essential for retirees to understand their tax residency status and comply with Peruvian tax laws, including registration with SUNAT and filing annual tax returns if required.
Disclaimer: The information provided is for general informational purposes and should not be considered legal or tax advice. Tax laws are complex and subject to change. For advice specific to your situation, consult a qualified tax professional or refer to official IRS resources.