Changes to the UIT and Its Effects on Income Tax
The SUNAT (Superintendencia Nacional de Aduanas y Administración Tributaria – National Superintendency of Customs and Tax Administration) has updated the tax parameters for 2025, establishing new income thresholds that determine the obligation to pay Income Tax (IT) in Peru. With the UIT (Unidad Impositiva Tributaria – Applicable Tax Unit) set at S/5,350 for 2025, the annual income that exempts one from paying Income Tax rises to S/46,813, which is equivalent to a monthly income of S/3,901. Compared to last year, the UIT was set at S/5,150, so the income threshold that exempted the payment of income tax was S/45,062 per year (equivalent to S/3,755 per month).
Benefited from This Exemption
It benefits both workers on the payroll (fifth category) and those who issue fee receipts (fourth category), as long as their annual income does not exceed S/46,813. The update enables a broader group of people to be exempt from the automatic monthly withholdings applied by the tax system.
Progressive Income Tax Rates for 2025
The Peruvian tax system applies a progressive rate model based on annual income level. For the 2025 fiscal year, the SUNAT has defined the following brackets:
- From 0 to 5 UIT (up to S/26,750): 8%
- From 5 to 20 UIT (S/26,750 to S/107,000): 14%
- From 20 to 35 UIT (S/107,000 to S/187,250): 17%
- From 35 to 45 UIT (S/187,250 to S/240,750): 20%
- More than 45 UIT (from S/240,750): 30%
This scheme aims to guarantee a more equitable tax collection, in which those with higher incomes pay proportionally more, according to their economic capacity.
Suspension of Withholdings for Self-Employed Workers
Fourth-category taxpayers may request the suspension of income tax withholdings through the SUNAT’s website if they project annual income below the threshold of S/46,813. Once the request has been processed, the payments received will no longer be subject to withholding. If the income limit is exceeded during the year, the worker must regularize his/her situation.
Accounting and Tax Advisory Services in Peru
In this new tax environment, accounting and tax advice in Peru is more fundamental than ever. Our accounting and tax services aim to ensure regulatory compliance and optimize tax burden. If you need tax and accounting advice, our accountants specializing in taxes in Lima are at your disposal.
Conclusion
The UIT update and the new SUNAT limits for 2025 represent a significant opportunity for many Peruvian taxpayers to optimize their tax situation. Workers, both dependent and independent, must keep informed and take the necessary steps to benefit from these provisions.
Act Now!
If you are self-employed and expect to earn less than S/46,813 a year, do not wait any longer and apply to suspend IT withholdings through the SUNAT’s website. To ensure compliance and benefit from proper tax planning, we recommend tax and legal advice from specialists.
Source: La República