For car owners in Peru, regular maintenance and occasional repairs are necessary to keep vehicles in good condition. However, one important factor to consider when budgeting for these expenses is the Value Added Tax (IGV). If you’re wondering whether car repairs and maintenance are subject to IGV, this article will provide you with all the details you need to know.
What is IGV in Peru?
Impuesto General a las Ventas (IGV), or General Sales Tax, is the 18% tax applied to most goods and services in Peru. It consists of a 16% general rate and a 2% municipal promotion tax. This tax applies to a wide range of transactions, including the sale of goods, imports, and services rendered by businesses.
Are Car Repairs and Maintenance Subject to IGV?
Yes, car repairs and maintenance services are subject to IGV in Peru. Whether you take your vehicle to an official dealership, a certified auto repair shop, or an independent mechanic, any service that involves labor and the sale of spare parts or materials will generally include IGV in the total price.
Here’s how IGV applies in different scenarios:
- Labor Costs – If a mechanic charges you for labor, IGV is applied to the service fee.
- Spare Parts & Materials – If your repair involves purchasing new parts, the cost of these parts is also subject to IGV.
- Comprehensive Maintenance Packages – Some service providers offer full maintenance plans that cover inspections, fluid changes, and minor repairs. The entire package will be taxed with IGV.
Who is Responsible for Paying IGV on Repairs?
IGV is typically included in the total price you pay for repairs and maintenance. The service provider (auto shop or mechanic) is responsible for collecting the tax and remitting it to the Peruvian tax authority (SUNAT). When you receive an invoice for repairs, it should clearly list the net cost, IGV amount, and total price.
How to Identify IGV on Your Car Repair Invoice
When you take your car for servicing, always request an official invoice (factura or boleta de venta). This document should include:
- Business details (name, RUC number, and address)
- Breakdown of services and parts provided
- Cost of labor and materials
- IGV amount (usually 18%)
- Total amount payable
Exceptions and Exemptions: Are There Any?
Certain special cases may have different tax treatments, such as:
- Small, informal mechanics: If a mechanic operates without issuing invoices, they may not charge IGV, but this means the service is not legally documented.
- Government or special programs: Some government projects and corporate fleets may have tax deductions or exemptions depending on their status.
- Company vehicles: Businesses can often deduct IGV from car maintenance costs as part of their tax declarations if the vehicle is used for work-related purposes.
Can You Deduct IGV on Car Repairs?
For individuals, IGV paid on car repairs is typically a non-recoverable expense. However, businesses that use vehicles for commercial purposes (e.g., delivery services, ride-sharing, company fleets) can deduct IGV as part of their operational expenses. This helps reduce overall tax liability.
How to Calculate IGV on Car Repairs
If you want to calculate IGV on your car repair costs, you can use an IGV calculator like Calculadora IGV. Simply enter the net cost of the repair, and the tool will provide the tax amount and total payable price.
For example, if your repair costs S/500, the calculation would be:
- Net price: S/500
- IGV (18%): S/90
- Total price: S/590
To easily determine the IGV on any service, you can visit Calculadora IGV peru and get an instant calculation.
Conclusion
In Peru, car repairs and maintenance are subject to IGV at a rate of 18%. Whether you’re paying for labor, spare parts, or a full service package, IGV will be included in your final bill. To ensure transparency, always ask for a detailed invoice that clearly shows the tax amount. If you’re a business owner, remember that IGV paid on commercial vehicle repairs may be deductible as part of your tax expenses.
Understanding how IGV applies to car repairs helps you budget better and make informed financial decisions regarding vehicle maintenance. Always check with a tax expert or use an IGV calculator to ensure you’re paying the correct amount!
