Peru is composed of 25 regions and 1 province*. They are Amazonas, Ancash, Apurimac, Arequipa, Ayacucho, Cajamarca, Callao, Cusco, Huancavelica, Huanuco, Ica, Junin, La Libertad, Lambayeque, Lima, Lima*, Loreto, Madre de Dios, Moquegua, Pasco, Piura, Puno, San Martin, Tacna, Tumbes, and Ucayali
Poverty and unemployment levels have fallen dramatically in the last decade, and today Peru boasts one of the best performing economies in Latin America.
Population 32.5 million people (2019)
Lima (population of 9.87 million)
|Major cities|| |
1. Lima (9.87 million)
Spanish (official) 84.1%, Quechua (official) 13%, Aymara (official) 1.7%,
US$222 billion (2018)
|Unemployment rate|| |
6.4% (October 2019)
|Main industries|| |
mining and refining of minerals; steel, metal fabrication; petroleum extraction and refining, natural gas and natural gas liquefaction; fishing and fish processing, cement, glass, textiles, clothing, food processing, beer, soft drinks, rubber, machinery, electrical machinery, chemicals, furniture.
|Interest rate|| |
2.25% (November 2019)
Source: Trading Economics
|Political key info|| |
Pedro Pablo Kuczynski Godard won a very narrow presidential runoff election in June 2016. Facing impeachment after evidence surfaced of his involvement in a vote-buying scandal, President Kuczynski offered his resignation on 21 March 2018. Two days later, First Vice President Martin Alberto Vizcarra Cornejo was sworn in as president.
1.88% (October 2019)
|Total Car park|| |
Approximately 2.77 million vehicles (one in 11 inhabitants, est. 2017)
Average vehicle age is 13 years
|New vehicle registrations (Cars, LCV, Trucks)|| |
Approximately 168,700 vehicles were sold in Peru in 2019, up 1.7% year-over-year
While light vehicles sales rose 2.4% year-over-year to 151,997 units, heavy vehicls sales dropped 4.2% to 16,650 units.
|Top 5 brands (total market)|| |
1. Toyota (29,800 units)
1. Mercedes-Benz (1,053 units)
|Model preference top 5 (total market)|| |
Source: AhoraSeguros (2018)
|Total Fleet Park (company cars)/Fleet penetration in total fleet sales|| |
553,000 vehicles (approximately 20% of the country's total car park)
|Top 5 fleet brands (fleet market)|| |
National statistics are yet to be acquired.
|Fleet Model preference top 5 (fleet market)|| |
National statistics are yet to be acquired.
The basis of Company Car taxation in Perú is reflected in this overview. Different types of taxes are considered here: taxes related to the registration of the vehicle, income taxes and VAT aspects. Expected future developments are also briefly listed, if any.
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Vehicles: cars, vans, station wagons, trucks and buses not older than three years (Period counted from the first registration in the Vehicle Property Registry)
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OWNER (individual or entity) on 1 January of every taxable year
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1% x the Vehicle’s original purchase value, import value or value registered on books
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Taxable Income x 29.5%
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Permitted when they are used in permanent way for the development of the business.
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Accelerated amortization on the leasing contract period, under special requisites.
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(Car import/ car sale/car lease value) x 18%
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VAT payable = Output VAT – Input VAT
Enterprises recognized as general taxpayers are entitled to use the input tax to credit against the output tax.
Output VAT = sales value*applicable tax rate
Input VAT = purchase value*applicable tax rate
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Taxable as financial service: Leasing interests x 18%
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Vehicles import/ vehicles sale (by importer), included in the following NANDINA Tariff item numbers:
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Limited deduction for cars of categories A2, A3, A4, B1.3 and B1.4, assigned to use on Management, Direction, Representation or administration activities:
- Limited number of vehicles depending on annual income.
- Non permitted deduction when vehicle purchase value is over 30 Tax Units (2018 Tax Unit = PEN 4150)
Company car provided for private use of employee is taxable for employee, as part of work income.
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- Expenses deductible by driver if he assumes the expenses, and driver’s income qualifies as business income.
- Expenses not deductible on driver´s personal tax return if cost are assumed directly by Company. Duly supported, deduction is allowed to the Company (with limits settled on point 5).
Vehicles subject to duties
Included on NANDINA tariff item Code 87.03 “Passenger cars and other motor vehicles principally designed for the transport of persons (other than those of heading 8702), including station wagons ( "break" or "station wagon") and racing”
CIF x 6%
Source: BDO (2018)
Meanwhile, owing to a 10% increase of the ISC selective tax on consumption determined by the ministry of economy and finance, the price of new passenger vehicles operating on gasoline in Peru is seen increasing some 12% on into the second semester of 2018, something that will affect upcoming fleet renewal decisions. Source: Peru's automotive association AAP.
Corporate cars in Peru pertain more to vehicles used for utility purposes as opposed to benefit cars for company executives.
Utility vehicles, or those used to support company operations, commonly involve pickups and vans. They are mostly used by on-site workers, technicians, construction supervisors, among others.
Benefit vehicles such as sedans, hatchbacks, and SUVs are mainly used by salespeople, managers, directors, and other executives. Usually, the higher the job position, the more exclusive the vehicle is.
Sometimes, the vehicle could be used for personal use but it really depends on the policy of each client. To monitor whether the driver is using the vehicle for business or personal use, tools such as GPS can be used. To better manage fleets, it is ideal for leasing companies to have a central communication center which directs phone calls to the appropriate department needed.
- Traffic accidents are handled directly with insurance companies
- In the case of vehicle maintenance or if the car breaks down, customers contact the central office to request service.
- Traffic ticket fines, however, are managed internally. Once recieved, customers are informed.
Approximately 30% of car sales were accomplished through vehicle credit, meaning special financing for cars. Buyers should first consult the annual effective cost rate TCEA being offered from the various creditors. Other options are personal loans or leasing.
As of the second semester of 2018, around half of the cars in Peru are bought in cash and only 20% are acquired through car loans from banks. According to BCP who leads vehicle financing with a 28% share of the market, this is an opportunity for the bank which is expecting its vehicle loans to be up by 8% in 2018. To help achieve this, the bank is offering Compra Inteligente BCP (intelligent purchase BCP) which offers 45% lower financing rates than a conventional credit line.
January 20, 2020
Average gasoline price per liter: US$1.10 (world average is US$1.11)
Average diesel price per liter: US$1.03 (world average is US$1.03)
June 1, 2019
Average electricity price per kWh Households: US$0.21 (world average is US$0.15)
Average electricity price per kWh Business: US$0.14 (world average is US$0.12)
- Gasoline in Peru is mixed with up to 7.8% ethanol.
- Pushing for the import of cars using natural gas by reducing ISC tax to 10% from 30%.
- To push for the reduction of gasoline vehicles, there is 0% ISC tax on electric vehicles.
Traveling by personal car to and from work in Lima costs an average of 238 Peruvian sols (US$73) per week, while using other means of transport cost 40 sols on average, nearly five times less. The former (private car) includes the cost of maintenance, insurance, fuel, parking, etc.
Traffic is one of the reasons why traveling in your own car can get expensive. Besides fuel consumption increasing every time you sit in a traffic jam, road congestion increases wear and tear on vehicle parts. This, in turn, results in more maintenance and a shorter life for your vehicle.
Average weekly public transportation cost in Lima
minibus: 30 sols
bus: 39 sols
motorcyle: 55 sols
taxi: 57 sols
mototaxi: 66 sols
Source: Study carried out by the Pacifico University graduate school and consultancy firm Marketwin called "Tráfico y Tendencias de la Movilidad Urbana en los Limeños" (Traffic and tendencies of Urban Mobility in Lima).
Safety regulation is not very strict in Peru. According to the transport and communication ministry, among the features needed on cars are very basic (e.g. bumpers, windows, and brakes).
Most robbed car brands
Approximatly 23% of the cars in Peru have insured, and about 70% of drivers have the SOAT obligatory insurance for bodily injury
SOAT covers all persons who are victims of a traffic accident (driver, vehicle occupants and pedestrians). It is very complete as there is no limit as to the number of victims in an accident. However, there are various types of vehicle insurance. While getting protection which includes bodily injury, collision, and theft can give you peace of mind, opening up a policy for only bodily injury and protection only in the case of a total loss could pose some high risks.
Cheapest models to insure:
- Suzuki Alto 800
- Chery New QQ
- Chevrolet Spark
- Volkswagen UP
- KIA Picanto
- JAC J4
- Hyundai i10
- MG 3.
All vehicles in Peru in the road transport and distribution industry are required by law to report their GPS location to the SUTRAN monitoring and management center. The law is mostly aimed at preventing heavy vehicles from exceeding national speed limits and helping to reduce the high incidents of road accidents in Peru.
Companies that provide fleet control software are required to transmit the following vehicle data to SUTRAN.
- Vehicle Registration
- Routes Traveled
- Geolocation (Latitude and Longitude)
Approximately 82% of Peruvians drive their vehicles below the minimum standard of what is considered to be good driving, according to a study called "Driving Style" carried out by road safety company Tracklink.
This minimum standard of good driving considers having a 9% frequency of accidents, which is the maximum percentage "acceptable" in the European Union. In the case of Peru, this number is above 40%. Moreover, on a 0-100 scale with 100 being best, 82% of drivers in Peru failed to reach the 55-point minimum considered to be acceptable driving. The average score in Peru was 38.3.
According to local reports, about 90% of Peruvians are interested in buying these types of cars.
However, neither the commercial offer of EVs nor the necessary infrastructure for these types of vehicles is sufficient enough to really take advantage of tax breaks. It should still be a few years until automakers really start bringing EVs into the market. Initially, they will be focusing on the luxury market, corporate cars, and passenger transport.
Since 2016, Peru has only imported 32 EVs and 519 hybrids, according to the country's automobile association AAP (Asociación Automotriz del Perú). Starting in December 2019, however, the country is set to kick off new regulations aimed at promoting electric and hybrid vehicles and power supply infrastructure.
Part of the government’s 2019-30 national competitiveness and productivity plan, the regulations set subsequent electromobility milestones that envision decentralized pilot projects by 2021, Peruvian technical standards for charging stations by 2025 and electric buses operating in Lima, Arequipa and Trujillo by 2030.
In the meantime, companies linked to the local energy sector are seeking long-term regulatory changes and public-private partnerships aimed at harmonizing the basic fundamentals of the industry, including aspects such as developing a standard connection for vehicles wanting to recharge on the electricity grid.
Peru loses 5.5% of GDP due to mobility problems: 1.5% in accidents, 1.5% in health, 1.5% in lost time and 1% on fuel.
- In Lima, about 16% of its residents use their own cars to get to and from work.
- Approximately 57% of residents in Lima spend more than two hours a day traveling back and forth to work.
- As such, 8% of the residents in the city have moved closer to their work or place of study to reduce the time and cost of commuting.
To resolve traffic congestion, one thing Peru is trying to do is stimulate the usage of bike sharing systems, something that is lacking in the country.
In February 2017, the Urgente Pedal (Urgent Pedal) pact was signed in Lima, a commitment to contribute to sustainable mobility by promoting the use of bicycles for workers, customers and suppliers. Within one week after the launch of the proposal, nine entities and business groups signed the pact.
However, according to to a study on traffic in the metropolitan region of Lima carried out by consultancy company Marketwin in September 2017, only 2% of the population in the city would be willing to replace their car with a bicycle or non-motorized vehicle.
There has been a fall in new gasoline driven car sales due to the rise in the selective consumption tax ISC to 10% from 0%. However, there has been an increase in the imports of used cars operating on natural gas due to the reduction of ISC to 10% from 30%.