Peru shifts 2 points from the IGV to the municipal tax by 2029, keeping the 18% total
This page records one dated change. For the rules in Peru as they stand today, see the Peru guide →
- Jurisdiction
- Peru
- Tax
- VAT (IGV/IPM)
- Change type
- Rate change
- Status
- In force
- Impact
- Plan ahead
- Announced
- 16 June 2025
- Effective
- 1 January 2026
- Authority
- Diario Oficial El Peruano
- Verified
- Fetched from official source · high confidence
All IGV taxpayers in Peru, and anyone whose invoices or accounting systems show the IGV and IPM components separately.
Update IGV rate in accounting and tax systems annually: IGV 15.5% from 1 January 2026 (now in force); IGV 15.0% from 1 January 2027. Rates on invoices and software must reflect each year's split.
Ley N.° 32387, published in El Peruano on 16 June 2025, progressively transfers 0.5 percentage points per year from the IGV to the IPM (Impuesto de Promoción Municipal, which funds FONCOMUN local government transfers), keeping the combined burden at 18%. Schedule: 2026 IGV 15.5% + IPM 2.5%; 2027 IGV 15.0% + IPM 3.0%; 2028 IGV 14.5% + IPM 3.5%; 2029 IGV 14.0% + IPM 4.0%.
What changed in detail
Ley N.° 32387, published in an extraordinary edition of El Peruano on 16 June 2025, increases the yield of the Impuesto de Promoción Municipal (IPM), which funds the Fondo de Compensación Municipal (FONCOMUN) for local governments.
Article 2 raises the IPM gradually from 1 January 2026 by 0.5 percentage point in each fiscal year from 2026 to 2029, a total increase of 2 points. The law sets the end-point rates by amending article 76 of Decreto Legislativo N.° 776 (IPM at 4%) and article 17 of the IGV Law (IGV at 14%), reached in the same four steps. The combined rate stays at 18%.
| Year | IGV | IPM | Total |
|---|---|---|---|
| 2026 | 15.5% | 2.5% | 18% |
| 2027 | 15.0% | 3.0% | 18% |
| 2028 | 14.5% | 3.5% | 18% |
| 2029 | 14.0% | 4.0% | 18% |
Articles 3 and 4 set the conditions under which municipalities receive the extra FONCOMUN resources and limit their use to public investment projects.
What it means
The 2026 split (IGV 15.5% plus IPM 2.5%) is in force, and the 2027 step to 15% plus 3% takes effect on 1 January 2027.
Customers see no price change: the rate on the invoice is still 18%. The work is in systems that hold the two components separately, such as accounting ledgers, tax codes and invoice layouts that print the IGV and IPM lines. Each needs updating once a year until 2029.
Special rates are affected too. The reduced IGV rate for small restaurants and hotels under Ley N.° 32219 is charged with the IPM on top, so the combined rate rises with each IPM step.
Proof
Se dispone el incremento del rendimiento del impuesto de promoción municipal (IPM), que forma parte de los recursos del Fondo de Compensación Municipal (FONCOMUN), de forma gradual a partir del 1 de enero de 2026, hasta llegar al incremento de 2 %The yield of the municipal promotion tax (IPM), part of the resources of the Municipal Compensation Fund (FONCOMUN), is increased gradually from 1 January 2026 up to an increase of 2%
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