Changes to the Tax Unit and its Impact on Income Tax
The National Superintendency of Customs and Tax Administration (SUNAT) has updated the tax parameters for the year 2025, establishing new income thresholds that determine the obligation to pay Income Tax (IT) in Peru. With the Tax Unit (UIT) 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 ITU 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).
Who benefits from this exemption?
This benefit applies both to workers on the payroll (fifth category) and to those who issue fee receipts (fourth category), provided that their annual income does not exceed S/46,813. The update allows a wider 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 according to annual income level. For the 2025 tax 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 seeks to guarantee a more equitable collection of taxes, in which those with higher incomes pay proportionally more, according to their economic capacity.
Suspension of Withholdings for Self-Employed Workers
Fourth category taxpayers have the possibility of requesting the suspension of income tax withholdings if they project annual income below the limit of S/46,813. This request must be made to the National Superintendency of Tax Administration (SUNAT) through its virtual platform enabled for this purpose. 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 or her situation.
Accounting and Tax Advisory Services in Peru
In this new tax environment, having accounting and tax advice in Peru is more important than ever. Our accounting and tax services are designed to ensure regulatory compliance and tax burden optimization. If you need tax and accounting advice, our accountants specializing in taxes in Lima are ready to help you.
Conclusion
The ITU update and the new limits established by SUNAT for 2025 represent a significant opportunity for many Peruvian taxpayers to optimize their tax situation. It is essential that workers, both dependent and independent, are 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, don’t wait any longer and apply to suspend IR withholdings through the SUNAT virtual platform. To ensure compliance and benefit from proper tax planning, we recommend that you seek the support of specialists in tax and legal advice.
Source: La República