Peru: Law for refund of IGV for exploration in mining and hydrocarbon activity extended until 2027

This Minem release was published using machine translation.

The Congress of the Republic approved in a second and final vote the Law that extends the validity of Laws 27623 and 27624, with the purpose of promoting exploration in mining and hydrocarbon activities and, thus promoting the development of new projects. investment in the country.

After the debate, the bill sent by the Executive Power to Parliament, obtained 60 votes in favor, 35 votes against, and three abstentions.

With this rule, the validity of Law 27623, which provides for the refund of the General Sales Tax (IGV) and Municipal Promotion Tax to the holders of the activity, is extended for five more years, until December 31, 2027. during the exploration phase, and Law 27624, which provides for the refund of both taxes for the exploration of hydrocarbons.

The Ministry of Energy and Mines (MINEM) maintains that the approval of the aforementioned law is very important, because it will allow increased investment in hydrocarbon exploration (oil and natural gas) and mining, which will attract new investors to the country, generating direct and indirectly, as well as the revitalization of the local and regional economy.

It should be noted that hydrocarbon and mining exploration activities include geological studies and/or exploratory drilling to determine whether or not there are reserves and/or resources.

Hydrocarbon and mining exploration is the starting point for new mines and/or hydrocarbon batches to operate in the future, generating growth and development in various regions such as Arequipa, Puno, Cusco, Junín, Moquegua, Lambayeque, La Libertad, Piura, Huánuco, just to mention the main ones.

Finally, MINEM reports that this tax policy is a common practice in other countries in the region (Colombia, Ecuador, among others) to attract investors and thereby improve the quality of life of its population. Therefore, maintaining the validity of the standard will promote the competitiveness of Peru compared to neighboring countries.