The Law applies to the following:
1. Taxpayers of the small and medium-sized enterprises (SMEs) tax regime and general income regime that work mainly in the textile and apparel industry within the International Standard Industrial Classification of All Economic Activities (ISIC Revision 4).
2. Taxpayers included in the Law of the Agrarian Labor and Incentives for the Agricultural (Irrigation, Exports and Industry) Sector Regime (only with respect to the additional deduction for hiring workers and to the contributions to ESSALUD).
Profit reinvestment for the textile and apparel sectors
- The taxpayers mentioned in item 1 who reinvest their profits after paying income tax (IR) are entitled to a tax credit of 20% of the reinvestment of the annual profits, during fiscal years 2024 to 2028.
- A reinvestment is defined as any action that, until fiscal year 2028, implies the use of part of the annual profits, after paying the income tax, to acquire assets for the purpose of the activities indicated in item 1 and that represent an annual increase in production of at least 5% with respect to the previous year.
- The tax credit is based on (i) the reinvestment program, (ii) proof of payment or import declarations for consumption, (iii) accounting entries reflecting the investments and (iv) annual reports of profit reinvestment.
- Assets acquired under a reinvestment program must meet the following criteria: (i) their value cannot exceed the market value, which is determined in accordance with the income tax regulations, (ii) they must not be transferred before they are fully depreciated.
Special depreciation regime for property, plant and equipment (PPE) for the textile and apparel sectors
- The depreciation of PPE used by individuals and legal entities included in item 1 and acquired during fiscal years 2024 to 2028 with the purpose of producing taxable income is determined by estimating its value and calculating the annual depreciation percentage of up to 33.33% for PPE acquired in fiscal years 2024 and 2025, and of 20% for those acquired in fiscal years 2026, 2027 and 2028, until its total depreciation.
- This special depreciation regime does not apply to the investments that, as of 30 December 2023, were included in legal stability agreements.
Additional deduction for hiring workers in the textile and apparel sectors
- Any taxpayer included in the general or SMEs regime who hires one or more new workers, to determine the income tax for fiscal years 2024 to 2028, may apply an additional deduction equivalent to 70% and 50% for the fiscal years 2024 and 2025, respectively, and 30% for the fiscal years 2026, 2027 and 2028, of the basic remuneration paid to the new worker, regardless of their workday and type of contract, provided that the taxpayer complies with the requirements set forth in the regulation.
Additional deduction for hiring workers in the agricultural (irrigation, exports and industry) sectors
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From fiscal years 2024 to 2028, the benefit of the additional deduction for hiring workers will apply to individuals or legal entities receiving business income, included in the Law of the Agrarian Labor and Incentives for the Agricultural (Irrigation, Exports and Industry) Sector Regime.
Contributions of the agricultural (irrigation, exports and industry) sectors to ESSALUD
- From January 2024 to December 2028, the monthly contribution to ESSALUD for workers included in item 2 hired by agricultural companies will be determined by applying a 6% rate on the remuneration effectively paid in the month.
Exclusion
The following individuals do not enjoy tax benefits:
- Individuals who have an incontestable conviction for tax or customs offenses.
- Individuals who are or have been included in the scope of the Law to ensure the immediate payment of civil remedies in favor of the Peruvian State in cases of corruption and related crimes.
We trust that this information will be useful to you and your company. Should you require legal advice on this matter, please do not hesitate to contact us.
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