The IGV and streaming services

7 May, 2024

The digital economy generates new scenarios to trade goods and services in the international market; among them are streaming services (Netflix, HBO, Spotify, and Disney+, among others), which are digital services.  

Taxation Forms Under the OECD   

The OECD BEPS Plan proposes and analyzes the new scenarios Tax Administrations face in the digital era. According to Agreement 1 of the referred plan, tax authorities usually approach tax VAT on digital services based on the residence of the supplier or the residence of the customer. In the latter case, the OECD recognizes that jurisdictions face difficulties in the effective assessment of the tax when the supplier resides in a country other than that of the customer.   

Initially, it was suggested that the customer should self-assess the tax, but the proposal looks hindered by the high likelihood of non-payment. Therefore, the OECD recommends that the states implement an appropriate system to enforce the Value Added Tax (VAT), known in Peru as the IGV (Impuesto General a las Ventas – General Sales Tax). 

Application in Other Countries 

Several states have observed in advance this new context of the digital era and have adapted their domestic legislation to levy VAT on streaming services.  


In 2016, Colombia implemented the provision of VAT taxation for the rendering of services from abroad to a user resident locally, which allows streaming services to be taxed. Colombia has opted for a supplier to collect (if the customer is an individual), who must be registered with the DIAN and file the corresponding statements. Likewise, the tax could be optionally withheld by the financial system companies in 2018. 

European Union (EU) 

Due to the difficulty of taxing the supplier of the tax assessment, the EU has implemented the Valued Added Tax (VAT). It consists of an identifying tool for companies resident in EU countries so that their transactions with other member countries, which are subject to VAT, are taxed and effectively collected, i.e. if a digital service (digital good) is configured between EU member countries, the supplier must register with the VAT so that the tax authorities of the country, taxing the activity may collect the tax from the supplier. 

Does the Peruvian Legislation Consider the Taxation of this Service? 

On the other hand, the IGV Law considers as taxable the rendering or use of services in the country, even when rendered by a non-domiciled person. Although it would apparently consider the performed digital services, in fact, the regulation does not indicate the mechanism to collect the IGV. In this regard, streaming services in Peru are not currently taxed by the IGV effectively.   

Bills No. 6181/2020-CR and 2546/2021-CR proposed to amend the tax legislation, establishing that the taxpayers would be the digital service suppliers. Both proposals, as in the Colombian case, proposed collecting the tax by establishing as withholding agents the financial entities through which the customer pays for the service. Conversely, these projects did not prosper.  

Currently, the MEF (Ministerio de Economía y Finanzas – Ministry of Economy and Finance) and SUNAT (Superintendencia Nacional de Aduanas y de Administración Tributaria – National Superintendence of Customs and Tax Administration) intend to implement the necessary measures to tax the streaming services. The system to be implemented is the same as the aforementioned bills. 

Effects on Peruvian Consumers   

The IGV (VAT) tax on streaming services will obviously cause the consumer to pay more for such services. Thus, for example, if the consumer pays approximately S/28 for the Disney+ subscription, with the taxation of the service at the 18% IGV rate, he/she would pay approximately S/ 33. 


In fact, since 2017, Peru adhered to the aforementioned OECD BEPS Plan. Hence, Peru needs to adopt a system for taxing services and collecting them effectively.   

According to the proposals put forward by Peru, the taxation of streaming services would generate the following: i. The financial system entities must incur costs to implement a system identifying and collecting the tax; ii. The consumer would pay more for streaming services; iii. The Administration benefits from an increase in tax collection.  

Despite several proposals, Peru has not yet implemented a collection system. Therefore, VAG GLOBAL offers tax and legal advisory services, catching you up with the Peruvian regulations. Do not hesitate to contact us. 


Sources: OCDE / Congreso de República / SUNAT