Capital Gains Taxation in Peru
In Peru, capital gains are subject to taxation under the Income Tax Law (Ley del Impuesto a la Renta). The law defines capital gains as the profit obtained from the sale or transfer of assets, including:
- Real estate
- Stocks and bonds
- Business assets
- Intellectual property
Calculation of Taxable Capital Gains
Taxable capital gains are calculated as the difference between the selling price of the asset and its acquisition cost. The acquisition cost includes the original purchase price, as well as any expenses incurred in acquiring the asset, such as brokerage fees or legal fees.
Tax Rates
Capital gains are taxed at a flat rate of 5%. However, certain types of capital gains may be exempt from taxation, such as gains from the sale of a principal residence or gains from the sale of assets held for more than five years.
Legal Framework
The taxation of capital gains in Peru is governed by the following articles of the Income Tax Law:
- Article 17: Defines capital gains as the profit obtained from the sale or transfer of assets.
- Article 20: Specifies the tax rate for capital gains.
- Article 21: Outlines the exemptions from capital gains tax.
Policy Objectives
The Peruvian government's policy objectives behind the taxation of capital gains are to:
- Generate revenue for the government
- Encourage investment in productive assets
- Promote economic growth
Conclusion
The capital gains tax system in Peru is designed to ensure that individuals and businesses contribute their fair share of tax on profits realized from the sale or transfer of assets. The flat tax rate of 5% provides a simple and transparent tax regime, while the exemptions and preferential treatment for certain types of capital gains aim to encourage investment and economic growth.
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