Special Economic Zones that provide targeted tax incentives are widely used across Latin America but have so far not played a major role in Peru. The existing SEZ regime was geared more towards addressing domestic issues rather than attracting foreign investment and resulted in only four operational zones with limited economic activity. In 2025, Peru passed a framework law establishing the possibility to create Private Special Economic Zones (ZEEPs) with substantial tax concessions, including a five-year corporate income tax exemption followed by reduced rates for 20 years. Important implementing regulations still need to be defined, which provides a window of opportunity to refine the design of the new ZEEP regime.
OECD Tax Policy Reviews: Peru 2026
Abstract
Income-based tax incentives have shown mixed results across countries and come with significant risks (Jenkins et al., 2025[1]; OECD, 2026[2]). Income-based tax incentives1 often come with sizeable revenue costs if they are poorly targeted or overly generous. They can also result in windfall gains for investors who would have invested even in the absence of the incentive. In light of the empirical evidence, a long-standing recommendation has been for countries to assess whether expenditure-based incentives, such as accelerated depreciation or investment tax credits or allowances, can achieve the intended goals more efficiently and cost-effectively (IMF-OECD-UN-WB, 2015[3]; IMF-OECD-UN-WB, 2025[4]). Under BEPS Action 5, income-based preferential tax regimes that fail to comply with the minimum standard, including any one of the key factors such as ring-fencing, transparency, exchange of information, or the substance requirements, and are expected to have a significant BEPS impact, are also at risk of being classified as “harmful” by the OECD Forum on Harmful Tax Practices (FHTP), in the absence of a commitment to address the identified deficiencies within agreed timelines. Finally, international tax rules, in particular the Global Minimum Tax (GMT), may have reduced the value of certain income-based incentives for large MNEs (OECD, 2022[5]; OECD, 2026[6]), which may lower the cost-effectiveness of income-based tax incentives going forward (i.e., such incentives could result in lower revenues for Peru without reducing the effective tax rate of the investor). Annex A presents an overview of the empirical literature on corporate income tax incentives.
Despite the risks, income-based tax incentives continue to be widely used in SEZs across the LAC region and beyond (OECD, 2025[7]; OECD, 2026[8]). More than a quarter of all identified CIT incentives across ten LAC countries are linked to SEZs, and seven out of ten countries offer at least one CIT incentive within a SEZ (Orozco et al., 2026[9]).2 Globally, 56 out of 70 developing countries included in the OECD Investment Tax Incentives Database provide tax incentives to investors in SEZs (OECD, 2025[7]).3 In some countries, such as Costa Rica and the Dominican Republic, significant economic activity takes place in SEZs (OECD, 2025[10]; CNZFE, 2025[11]). However, even where significant activity takes place in SEZs, their benefit to the country will depend on the type of investment that is attracted, the spillovers that the activity in the zone generates for the domestic economy, and how the tax incentives in the zone are designed (Frick and Rodríguez-Pose, 2021[12]; World Bank, 2017[13]). For example, income tax holidays have been found to be especially vulnerable to the risk of providing insufficient value for money (IMF-OECD-UN-WB, 2025[4]). Peru’s more limited experience with SEZs means that its tax incentive design can draw on the lessons from other countries in the region, including on where risks have materialised.
Where expenditure-based alternatives are not chosen, a number of principles have been identified in the literature regarding the optimal design of income-based tax incentives (IMF-OECD-UN-WB, 2015[3]; OECD, 2026[2]; IMF-OECD-UN-WB, 2025[4]). Income-based incentives are generally more cost-effective when they are limited in time, when eligibility criteria are transparent (OECD, 2023[14]) and involve little discretion and when the Ministry of Finance and tax administration are closely involved in their design and monitoring. It is also considered good practice to include an estimate of the revenue forgone of each tax incentive in the tax expenditure (TE) report and to conduct regular cost-benefit analysis. This analysis can include an estimate of the economic benefit generated for every unit of tax revenue forgone.
SEZs have so far played only a modest role in attracting investment into Peru. The country’s existing regime, with the first zone established in 1989, was designed to stimulate regional development and its four operational zones are all located in remote areas or close to Peru’s international borders.4 The four zones are open to general economic activity5 and the Zofratacna commercial zone serves the additional purpose of formalising trade and reduce smuggling at the Peru-Chile border. Economic activity in the zones consists mostly of smaller domestic businesses in logistics, trade, agro-industry and mining support services, and the overall activity in SEZs has remained limited. Fewer than 3 000 workers are employed across the four zones (Figure 6.1). Exports from the zones account for only 0.1% of total exports (AZFA, 2025[15]; AZFA, 2024[16]). This is despite generous tax incentives, including an indefinite exemption from corporate income tax (CIT) and most indirect taxes. Investment from foreign investors in Peru remains meanwhile concentrated in natural resources, finance and communications (European Union Office in Peru, 2022[17]). These sectors are typically not well suited to be developed through SEZ regimes as the expected returns are largely driven by location-specific rents (Klemm, 2010[18]).
Peru is now planning to expand and redefine the role of SEZs and, to this end, passed a framework law in 2025. The law establishes the possibility to create Private Special Economic Zones (ZEEPs) which will come with substantial tax reductions for both the zones’ operators and for investors who decide to carry out economic activity in the zone.6 Unlike the earlier SEZ regime, ZEEPs would be run by private operators. Operators may not have any economic link with users (i.e., businesses who invest and operate within the zone). A 0% CIT rate is foreseen to apply to qualifying activities in the first five years of operation, followed by reduced rates for the subsequent 20 years. These income-based incentives will come with significant risks (see above). Firms in the zone are also exempt from most indirect taxes, such as the VAT or the selective consumption tax (see Box 6.1).7 Two lists define what type of activity can be carried out in ZEEPs and what activity is excluded: one list defines the sectors that cannot enter the zone, and a second (more restrictive) list defines which sectors cannot benefit from the CIT tax incentives. This means that there are certain activities, such as logistics, which can be carried out in a ZEEP and qualify for the tax benefits, including the VAT and excise tax exemptions, but cannot benefit from the CIT incentives. While no zones have yet been set up under the ZEEP regime, there are discussions about establishing the first zone close to the Chancay port (MEF, 2025[19]).
A decree published in April 2026 introduced a minimum size of 90 hectares for ZEEPs, and the regime could be strengthened by allowing authorities to also define the geographical areas in which zones can be established. The 90‑hectare minimum size applies across all provinces, except in the Province of Callao, where smaller zones may be created.8 Including a minimum size requirement constitutes good practice to ensure that each zone can realistically support a cluster of firms that interact positively with the local economy. The minimum size requirement for ZEEPs introduced through the decree could also be sensible in order to ensure substantial activity can take place in each zone and keep the monitoring costs manageable as the monitoring of each zone will likely involve fixed costs.
Important implementing regulations are still being finalised so that some uncertainty remains about the final design of the ZEEP regime. For example, it is not yet clearly specified whether VAT and excise tax exemptions for zone users would cover both goods and services, or whether these exemptions would be restricted to services only. Peru also still has to decide how to implement a provision in the law which foresees that fixed assets in the zone are depreciated for tax purposes starting from their sixth year of operation. Finally, the law specifies that the tax benefit period for both operators and users start when a new ZEEP opens, rather than when a specific investment is being made by a firm. This would mean that a firm investing right after the zone opened would be eligible for a longer tax reduction period than a firm investing in the same zone at a later point in time.9 Providing clarity on the final design would be crucial to support tax certainty.
The fact that no ZEEPs have so far been established could serve as an opportunity to adjust the foreseen design so that the regime is carefully designed from the start. Once a certain design has been put in place and investors have made decisions to invest, it can become more difficult to change the design (IMF-OECD-UN-WB, 2015[3]). One reason is that it is typically difficult to establish whether or not existing investors would have made the same investment decisions under a slightly modified SEZ regime design. Peru’s old SEZ regime illustrates this risk: it was extended until 2042 through Law 30 446 despite having largely been found not to have achieved its objectives (IMF, 2022[20]). The fact that certain implementing regulations for the ZEEP regime still need to be defined, and no investment decisions have been made until now in ZEEPs, could provide a window of opportunity to refine the design before its rules become entrenched.
Note: Figures refer to the most recent available year for each country. In Brazil, exports cover the Suframa zone only, while employment figures cover Suframa and ZPE Ceará. In Chile, all data refers to the ZOFRI zone. In Ecuador, data covers the ZF zones only. In Guatemala, export figures cover the ZF only, while employment figures cover ZF, ZDEEP, and ZOLIC zones. In Panama, exports refer to the ZF only, while employment includes Panama Pacífico. In Peru, data covers the four operational zones (Zofratacna, ZED Paita, ZED Matarani, and ZED Ilo); the remaining four (Zona Franca de Cajamarca, ZED Tumbes, ZED Loreto, and ZEE Puno) are included in Panel A but not operational. No ZEEPs have been established in Peru so far.
Source: AZFA (2024[16]), AZFA (2025[15]).
The 5-year tax holiday in combination with 20 additional years in tax reductions is a too generous design. At 25 years, the duration of the income tax reduction in ZEEPs may be longer than the useful life of some of the investments made in the zones. The regime establishes a tax exemption for 5 years followed by reduced rates for another 20 years. Even in the final phase of the period, the rate of 15% would be only around half of the standard CIT rate of 29.5%. If the ZEEP design continues to rely primarily on income-based tax incentives in the future, Peru could, at the minimum, consider replacing the CIT holiday in the first five years by a reduced rate. Countries in the region have adopted different approaches to the transition back to the standard rate. Costa Rica applies a stepped approach under which strategic manufacturing firms outside the metropolitan area pay 0% for 6 years, followed by 5% for 6 years and 15% for a further 6 years, before returning to the standard rate of 30%. Colombia, for example, does not use a tax exemption but instead applies a reduced rate of 20% for qualifying SEZ users, instead of its standard rate of 35%. In this context, Peru’s combination of an initial zero rate followed by a long period at a rate that remains well below the standard CIT appears generous. The ZEEP regime also far exceeds the time limit for tax incentives defined in Peru’s tax code, which foresees a maximum duration of three years, with the possibility of a single extension of up to three additional years subject to an impact evaluation.10
The CIT exemption in ZEEPs could be partially ineffective for large MNEs while still carrying significant revenue costs for Peru. The Global Minimum Tax (GMT) establishes a minimum effective tax rate of 15% for in-scope MNEs. This means that in-scope MNEs that benefit from the ZEEPs regime may see the benefits of the 0% tax rate reduced by the application of the GMT. The top-up tax may be collected by other jurisdictions, e.g., by MNEs headquartered in jurisdictions with an Income Inclusion Rule (IIR) or through the UTPR. ZEEP tax benefits can also be reduced by domestic tax provisions from foreign jurisdictions seeking to top-up the low-taxed activities of their subsidiaries abroad. In such cases, Peru could forgo the tax revenue to other jurisdictions without the investor benefiting from a lower overall tax payment. It would therefore be important for Peru to study the impact of these rules on its ZEEP design, which could involve considering introducing a Qualified Domestic Minimum Top-up Tax (QDMTT) or other domestic tax measures that would allow Peru to retain the top-up tax revenue. The extent to which these rules affect individual investors will depend on the size and structure of the MNEs Peru attracts, as well as their economic substance in the country, including how much they invest and how much they spend on salaries, among other factors, as the Global Minimum Tax allows for lower tax outcomes for MNEs that have high economic substance.
It is a positive feature that Peru’s ZEEP law does not provide for extending income tax benefits beyond the 25-year concession period. Currently, eligibility is tied to the investing firm, rather than the investment project, and after qualifying once, the same SEZ user cannot qualify again for the tax benefits. If extension rules are introduced in the future, it would be important that the qualifying reinvestment genuinely expands production, rather than simply sustaining existing operations. If the rules for reinvestment make it too easy to requalify, or if significant discretion is involved, there is a risk that these rules gradually erode the time limits and implicitly make the tax benefits significantly more generous than they are specified in the law.
A general lesson from Peru’s old SEZ regime is that generous tax incentives alone cannot offset structural investment barriers. The existing SEZ regime failed to attract meaningful investment, in particular from foreign investors, despite its generous tax incentives, including an indefinite CIT exemption. This is consistent with broader evidence that tax incentives cannot compensate for an otherwise weak investment climate (Klemm and Van Parys, 2012[21]; Chai and Goyal, 2008[22]; van Parys and James, 2010[23]). For example, the infrastructure in the existing SEZs in Peru was not adapted to accommodate larger scale investment (MINCETUR, 2025[24]). Due to the remoteness of the zones, connectivity to domestic and international markets remained limited. Certain legal hurdles might have also contributed to the limited success of the previous SEZ regime. For example, one zone is located close to the border while Peru’s constitution prohibits foreign investors from leasing or owning property within 50 km from the border (OECD, 2008[25]). Other structural investment barriers include the types of skills that are available in Peru. A recent OECD report concluded that many students in Peru lack basic competencies and skills relevant for the labour market (OECD, 2026[26]).
It is unlikely that a private operator model alone will overcome the structural barriers that contributed to the limited success of the old SEZ regime. Under the new ZEEP framework, each zone is managed by a private operator responsible for developing and maintaining the zone’s infrastructure. The operator is granted a licence to manage the zone and interact with its users, and benefits from the same CIT rate schedule as ZEEP users. The operator’s application to establish a new ZEEP is evaluated by the Ministry of Foreign Trade and Tourism (MINCETUR) with a binding opinion from SUNAT, according to the criteria set out in the law,11 and each zone then requires its own law that is approved by Congress. This model attempts to address one of the weaknesses of the old regime, where publicly managed zones lacked the infrastructure needed to attract firms on a larger scale (MINCETUR, 2025[24]). However, the private infrastructure within ZEEPs will still depend heavily on the public infrastructure outside the zones, including their connectivity to roads and ports, energy supply, or the availability of skilled workers. Even a well-managed private zone is unlikely to attract the intended investment in new economic sectors if the external infrastructure is lacking or of poor quality (e.g., there is no road to a zone that is established in a remote area). At the same time, without further restrictions on where zones can be established (see above), there is a risk that private zones will be located only in areas where infrastructure already exists and where the competition with existing domestic firms will be highest (e.g., close to the capital).
If Peru is successful in attracting advanced manufacturing or service firms into the ZEEPs, these firms will likely absorb some of the most skilled workers in the labour force. During the phase of reduced tax rates, ZEEP firms will contribute less than comparable domestic firms to the financing of infrastructure and education in Peru while benefiting from the country’s infrastructure and workers whose skills were developed in the national education system. This can be justified only if the zones generate additional activity with sufficient value-added and positive spillovers for the rest of the economy. It is also important that ZEEP firms do eventually contribute to the financing of infrastructure and skill development in the country (i.e., start paying tax after the tax reduction period is exhausted), and that the tax benefits granted in SEZs are not extended over time to cover, for example, social security contributions or the personal income tax of workers employed in ZEEPs. This is particularly relevant given that Peru already faces a shortage of skilled workers (OECD, 2026[26]).
Peru’s experience with the commercial zone within the Zofratacna illustrates the risks of trying to use SEZ regimes to achieve goals that could be better addressed through other tools. The Zofratacna is located close to the Peru-Chile border and, in its commercial zone, offers customers the option to purchase imported goods at reduced tax and tariff rates. Until 2027, this includes the sale of alcohol which is exempt from excise taxes. The activities carried out under such a regime are most likely not additional activities – i.e., economic activity that would have not taken place in Peru in the absence of the tax incentive – that create significant value added and spillovers. While a geographically delimited zone can make it easier to monitor and formalise some imports, the businesses would ideally have been brought under the regular tax and tariff system over time. Using a SEZ regime to formalise economic activity and grant tax reductions to certain vendors can create unfair competition for the rest of the economy. It could even induce these competitors to partially import and sell informally in order to compete with the prices offered in the zone. The case for the Zofratacna as a tool for regional development has also weakened because the possibility to purchase tax-reduced goods has been extended to online shopping. This allows consumers anywhere in Peru to order goods remotely from businesses operating in the zone without travelling to the region (Law 31 543). In the context of BEPS Action 5, the Zofratacna regime falls within the scope of the FHTP’s work due to the tax benefits it provides to income derived from geographically mobile activities and is currently under review by the FHTP.
The tax revenue forgone from SEZ regimes can be sizable and ultimately depends on the additionality12 of the activity that is created. In 2025, Peru’s Fiscal Council warned that zones established under the new ZEEP regime could result in a "significant and permanent loss of revenue" (Consejo Fiscal del Perú, 2025[27]). Tax expenditure (TE) reports in some countries that rely more extensively on SEZs routinely identify them as one of the largest sources of CIT revenue forgone (Ministerio de Hacienda de Costa Rica, 2025[28]; Ministerio de Hacienda de la República Dominicana, 2024[29]).13 Across ten LAC countries analysed, SEZs were found to reduce effective CIT rates by 85% on average (Orozco et al., 2026[9]). TE estimates typically use the "revenue forgone method", which assumes that all firms would fall under the standard tax system in the absence of the incentive (OECD, 2010[30]). If firms had invested regardless of the SEZ regime, the revenue forgone would indeed represent a net fiscal cost with no offsetting economic gain. However, if the activity is genuinely additional, in the sense that it would not have occurred without the incentive, even under a reformed standard tax system, the revenue forgone method could also overstate the true revenue loss. While relatively larger tax revenue risks remain whenever income-based tax incentives are used instead of expenditure-based incentives, appropriately targeting the SEZ regime to genuinely additional activity could be one strategy to help contain the tax revenue cost of the ZEEPs regime.
Industry targeting could help support additionality of activity in ZEEPs
Even if success is not guaranteed, the additionality of investment generated in ZEEPs may be strengthened if tax benefits within ZEEPs are more strictly limited to selected industrial activities that can be expected not to be developed under Peru’s standard tax regime, even if the current CIT would be reformed to be more competitive to stimulate or attract investment. The ZEEP law currently excludes financial, accounting and legal services, extractive activities such as mining and fishing, leasing, insurance and the exploitation of intellectual property rights, among other activities (see Box 6.1).14 There are good reasons to exclude these activities, but the resulting list of eligible sectors may still be too broad. A safeguard in the law is that a taxpayer can enter the zone only if it is not engaged in the "same economic activity" within the domestic economy, but such a condition will be difficult to define and enforce in practice. It could be preferable to define a whitelist of strategic target sectors that Peru wants to develop and that can benefit from SEZ treatment, rather than listing only those activities that are excluded.15 Ideally, activities that could develop under a reformed and more competitive CIT system would not be included in that list. Targeting investment tax incentives to specific activities is common across countries (OECD, 2025[7]),16 but the targeting is often broad in practice, with eligibility extending to the entire manufacturing or agricultural sector rather than more narrowly defined activities (Celani, Dressler and Wermelinger, 2022[31]).
Defining the list of eligible activities is a demanding exercise that would benefit from the involvement of all concerned government entities, including the Ministry of Finance and SUNAT. It could be informed by a technical analysis of the sectors in which Peru already has a comparative advantage. On that basis, it would identify new industrial activities that can be expected not to be developed under the standard tax system, even after a potential tax reform, and that have the largest growth potential, for example because they require skills or inputs close to those already available in Peru. There will be trade-offs to consider in this process: a definition that is too narrow may deter some investment (and create larger economic distortions by “picking winners” in a narrower category). A more extended list would increase the risk that some activity in the ZEEPs is not truly additional and thereby increase revenue cost. It could be useful to establish clear rules on how often, at the maximum, the industrial activity list can be updated if priority activities and other parameters of the ZEEP regime will need to be adapted over time. In general, eligibility criteria should remain stable and avoid frequent changes that create uncertainty, increase complexity, and may deter investors (OECD, 2026[2]). Any change that is being proposed should be validated by the Ministry of Economy and Finance and would ideally have to be codified in the law.
Bringing sectors where Peru is already competitive, such as natural resources, agriculture or tourism, into the ZEEP regime would not be a desirable outcome. If these sectors cannot develop sufficiently under the standard tax system, this would signal an urgent need for reforming the standard tax system (including of the specific regimes that already exist for these sectors), rather than extending SEZ treatment to these activities. Granting ZEEP benefits to sectors that already have a significant footprint in the domestic economy would also create particular risks of unfair competition.17 Firms that have already invested outside the zones would be disadvantaged relative to those investing in the zone. Eventually, it could create incentives to locate most new investment in these sectors in ZEEPs, which would threaten the existing tax base. For activities supplemental to the activities developed in the zones, but not eligible for tax incentives (e.g., logistics), one option would be to allow these firms to locate in SEZs without benefiting from the tax incentives to enable linkages with SEZ users. The current regime already foresees a partial version of this, where some activities can enter without benefiting from the CIT incentive. A more consistent treatment would be to also deny the indirect tax benefits (e.g., the VAT exemption) for these activities.
Beyond the arguments discussed above, there are additional reasons to consider using more refined industry targeting in ZEEPs to support additionality. Restricting access to SEZs to foreign firms, implementing export quotas or limiting zone firms' interactions with the domestic economy has been used in the past to prevent new domestic investment from migrating into special tax regimes (FIAS/World Bank, 2008[32]). However, these approaches have become increasingly difficult to sustain as they can violate international agreements. Under the WTO Agreement on Subsidies and Countervailing Measures, tax benefits that are contingent on export performance can be considered prohibited subsidies. Under the BEPS Action 5 framework, the "ring-fencing" of tax benefits from the domestic economy is one of the key factors that can lead the OECD Forum on Harmful Tax Practices (FHTP) to characterise a tax regime as "harmful" (OECD, 1998[33]; OECD, 2015[34]). Since the launch of the BEPS Project, the FHTP has reviewed over 330 preferential regimes with almost 40% of those regimes being abolished or amended following a review (OECD, 2026[35]). Several LAC countries adapted their SEZ design to bring their regimes into compliance with these standards (Heitmüller and Mosquera, 2021[36]). Limiting access to foreign investors or imposing export requirements is therefore not a viable alternative to sectoral targeting (and other eligibility criteria that apply to all firms, such as minimum investment amounts) as a means of ensuring that the ZEEP regime attracts genuinely additional investment.
The current ZEEP framework law does not limit access to foreign firms, include export requirements or restrictions on domestic sales. The regime is therefore not ring-fenced. The framework law also meets the other key criteria of the minimum standard, and the FHTP concluded at its November 2025 meeting that the design is "not harmful" under the BEPS Action 5 minimum standard (OECD, 2026[8]).18 This means that the regime’s ability to prevent non-additional investment from locating in the zones will rely on the strength of its sectoral targeting and other eligibility conditions that apply equally to all firms. If the sector targeting is too broad, domestic sectors could start locating most new investment in ZEEPs, even if this investment is not genuinely additional, which could threaten the domestic CIT base over time. If the eligible activities are defined narrowly enough so that only activities that are expected not to be developed under the standard tax system (either by domestic or international investors) qualify, the openness of the zone to domestic firms and domestic sales may be less likely to result in these risks for the domestic tax base. Strengthening the sectoral targeting along the lines discussed above could narrow the scope of eligible activities for both foreign and domestic firms without introducing ring-fencing or export requirements. Any concrete changes to the regime’s design as well as any implementing regulations would need to be assessed to ensure continued alignment with the BEPS Action 5 minimum standard.
Investment thresholds and eligibility criteria can complement industry targeting
Besides industry targeting, strict minimum investment amounts are important to concentrate incentives on those firms that invest a significant amount of capital in the country. The minimum investment thresholds in ZEEPs, currently set at 1 500 UIT (approximately EUR 2 million) for operators and 2 000 UIT (approximately EUR 2.8 million) for users, are an important complement to the sector list. These minimum amounts are not negligible, but the law allows them to be lowered in exceptional cases through a decree endorsed by the Finance and Foreign Trade ministers. Peru’s experience with the import tariff drawback regime illustrates the risks of allowing the parameters of tax benefits to be modified by ministerial decree (see Chapter 3).19 Allowing similar discretion in the ZEEP regime risks undermining the investment thresholds in practice, as they could be adjusted on an individual investor basis, and creating unequal treatment across investors. Fixing the minimum investment requirements in the law itself, rather than leaving them adjustable by decree, would provide more predictability for investors and reduce the risk of discretionary reductions that erode the required minimum investment in practice.
Other eligibility criteria could be considered to complement the investment thresholds and industry list, although this runs the risk of creating its own complexities and distortions. For example, no requirement on the number of jobs created is currently included in the eligibility criteria, as was also highlighted by Peru’s Fiscal Council (Consejo Fiscal del Perú, 2025[27]). While additional criteria based on observable outcomes, such as employment or sustainability commitments, could be considered,20 adding too many conditions comes with its own risks (OECD, 2026[2]). If the criteria are cumulative, there is a risk that the qualifying population of investors becomes too narrow to attract meaningful activity. If instead they are complementary, meaning a firm can qualify by meeting any one of the conditions, there is a risk that too many firms find a way to enter the zone, including from sectors outside the priority areas. Every additional requirement would have to be monitored, both when a firm enters the zone and over time, to verify that the firm actually carries out the promised activity. This means that these criteria need to be linked to indicators that can be observed (number of jobs, level of expenditure on training with a definition of what counts, etc.). Besides, every additional criterion based on observable outcomes would need to be carefully designed so it does not undermine other criteria (e.g., if a relatively low number of jobs would qualify a project for SEZ benefits). A simpler set of criteria, focused on a strict minimum investment threshold and a clearly defined list of eligible industrial activities, may be more effective and easier to enforce.
Tightening the targeting and eligibility criteria of the ZEEP regime could be combined with introducing expenditure-based tax incentives in the general CIT regime. Many of the challenges Peru faces, such as the lack and quality of infrastructure or the need to attract additional investment in sectors that are already present in the domestic economy, would ideally not be addressed through SEZ regimes. For these purposes, expenditure-based tax incentives such as investment tax credits or special deductions for salary costs, available to any firm that makes a qualifying investment in general economy (i.e., outside of SEZs), could be more appropriate instruments. These incentives have the advantage of being linked to the amount of investment or job creation, which means that the potential fiscal cost is proportional to the actual investment made in the country. These incentives can also receive more favourable treatment under the Global Minimum Tax (GMT).
Linkages and spillovers between ZEEPs and the domestic economy
Support activities such as cafeterias and restaurants can operate in ZEEPs without benefiting from the income tax reductions, but they currently still benefit from VAT and excise tax exemptions.21 Allowing these support activities to establish operations within the zone can help create linkages with domestic firms and contribute to economic activity around ZEEP users, even without extending the CIT benefits to them. A similar treatment could be applied more broadly to suppliers of ZEEP firms, which could be allowed to locate within the zone to benefit from the proximity to ZEEP users without receiving access to the tax incentives. In that sense, extending the indirect tax exemptions to support activities and suppliers may be reconsidered: making them subject to the regular VAT and excise tax rules would allow these businesses to remain within the regular VAT chain and pay excise taxes, for example when SEZ workers purchase goods for final consumption. This is the treatment that applies in Uruguay, for instance.22 A ZEEP user producing for export that purchases from domestic suppliers would then be able to recover the input VAT through the regular VAT refund mechanism. More generally, the excise tax exemptions granted to ZEEPs could be reconsidered, especially where they conflict with health and environmental objectives.
More broadly, the VAT treatment in ZEEPs needs to ensure that local suppliers are not disadvantaged while at the same time making it possible to monitor the flows between the zones and the rest of the economy. Under the current design, goods and services supplied from abroad to ZEEP users are exempt from VAT while domestic purchases remain subject to VAT, the municipal promotion tax and excise taxes. If the ZEEP user is not a registered VAT taxpayer and cannot claim input VAT credits, the VAT paid on domestic purchases becomes a permanent cost, making these local inputs more expensive than the equivalent imports. One option would be for all ZEEP users to participate in the regular VAT chain, paying VAT both on imports and on purchases from domestic suppliers, and recovering the VAT upon export. This would not affect the final tax liability because exports are VAT zero-rated and imports into the domestic market are subject to VAT. To reduce the liquidity burden on ZEEP users, the actual remittance of the VAT could be suspended: the tax would be registered but the payment would only become due if the goods enter the domestic market rather than being exported. A similar approach could be followed for import duties. Such a mechanism would preserve the VAT audit trail, remove the current disadvantage for domestic suppliers relative to foreign ones, and ensure that goods that enter the regular economy are properly taxed.
It is not clear whether providing income-based tax incentives to the firm that operates a ZEEP, in addition to the firms investing in the zone, can be justified on the grounds that operators are expected to develop infrastructure. One rationale for the private operator model, and for extending tax benefits to zone operators, is that operators are responsible for developing and maintaining the zone’s infrastructure. However, allowing operators to determine the location of zones is likely to result in zones being established in areas where infrastructure already exists and where competition with existing firms is strongest, for example close to the capital region. The decree published in April 2026 sets out additional criteria for determining whether a location qualifies for a ZEEP, which are likely to reinforce this pattern. These criteria prioritise areas with strong connectivity, access to energy, housing, health and education services, proximity to existing economic activity and the availability of skilled labour.23 While such locations may be best suited to attract investment, this raises the question of whether there remains a sufficiently strong rationale for extending income-based incentives to operators.
Additional observations about the planned tourism development zones
It is not clear whether the planned special tourism development zones in Peru will generate benefits that exceed their costs. Law 32 392 established the possibility to create special tourism development zones (Zonas Especiales de Desarrollo Turístico, ZEDT), which provide tax incentives to investors in the tourism sector, including a 5-year CIT exemption and reduced CIT rates for 10 additional years. However, tourism is a sector where Peru has a comparative advantage and where significant activity already exists in the domestic economy (MINCETUR, 2026[37]; OECD, 2024[38]). The risk of diverting future investment into the zones, rather than attracting genuinely new activity, could therefore be higher than for sectors that are not yet present in Peru. Law 32 392 will require an amendment as per a letter sent by Peru’s MEF to the Ministry of Tourism (see Chapter 3). This means there is an opportunity to improve the design, for example by ensuring the zones are limited to areas where there is currently little or no tourism activity to reduce the risk of crowding out existing operators. The eligibility criteria could also be narrowed to tourism activities that create significant “quality” investment and linkages with the local economy (OECD, 2018[39]).
Many of the structural barriers that can reduce the effectiveness of tax incentives in Peru more broadly apply equally in the tourism sector. Transportation infrastructure and connectivity remain limited in many regions and security concerns may discourage tourists from visiting the country (OECD, 2025[40]). Rather than (mis-)using the tax system, it would be more effective to tackle these tourism development hurdles at source. Furthermore, a large share of tourism activity is informal (INEI, 2025[41]). A CIT exemption or lower rate would not be an effective incentive for informal operators, and a better enforcement of the standard tax system could be a precondition for these tax incentives to work. This would be aligned with the finding that the recent temporary VAT reduction for the tourism sector did not achieve its goals and resulted primarily in windfall gains for already formal operators (World Bank, 2025[42]).
Administration, monitoring and transparency
It would be important for the SUNAT and the MEF to remain closely involved in the administration and enforcement and monitoring of the rules that apply to ZEEP businesses. Businesses need to be required to submit sufficient information to allow effective compliance checks, which at the minimum would include annual financial statements. This is also relevant during the period in which the CIT rate is 0%, as the way a business operates in these years will have implications for future years, for example through loss carry-forward or the depreciation of their assets.24 A key area for enforcement are the transactions between ZEEPs and domestic businesses, to ensure that goods entering the domestic economy are properly taxed under the VAT and applicable import charges and that ZEEPs are not used as a way to circumvent these obligations. Goods that enter the zone from abroad are foreseen to be exempt from VAT, customs duties and excise taxes as long as they remain within the zone. If these goods later exit the zone to the rest of Peru, the applicable VAT, excise taxes and import duties need to be paid, but enforcing this requirement in practice requires that the authorities can track what enters and exits the zone. Otherwise, there is a risk that goods imported tax-free into the zone end up in the domestic market without the applicable taxes being paid. There could also be a heightened risk of personal consumption through the firm in SEZ businesses as the incentives to do so are large (e.g., registering a car as a company car for a SEZ business if this means the car can be imported tax and tariff free).
As foreseen by the law, the ZEEP regime should be subject to regular analysis, and it is important to create transparency about its costs and benefits. It is good practice that the law requires the annual publication of statistics about who uses the zones (investment made, profits, revenues, number of workers employed, export statistics), and that this analysis is compiled by SUNAT and the MEF. The analysis would need to be complemented by an annual estimate of the revenue forgone (covering income tax incentives but, ideally, also other tax reductions and exemptions in ZEEPs) to be included in the tax expenditures (TE) report. Such estimates measure the static revenue forgone of the tax reductions, not accounting for the investment that would not have taken place without them. This is why it is important to include additional elements in the annual assessment so that readers can interpret the revenue forgone figure by evaluating whether the investment made is more likely to be additional or not. Over time, the analysis would also show whether firms in ZEEPs actually start paying CIT after they have surpassed the initial tax exemption period. When a specific ZEEP is established and parliament agrees to its creation, an analysis is required as per the ZEEP regulations (rationale, cost analysis) and this analysis would ideally be made public.
Legal basis and institutional framework
Law 32 449, approved by Congress on 16 April 2025 and published on 24 September 2025, establishes the framework for the creation of Private Special Economic Zones (Zonas Económicas Especiales Privadas, ZEEPs). Supreme Decree 005-2026-MINCETUR (SD), published in April 2026, provides further implementing regulations. Each future zone must be created by a separate law (approved by Congress with a two-thirds majority), following an assessment by Ministry of Foreign Trade and Tourism (MINCETUR), which is responsible for the authorisation, supervision, and regulation of the zones (Articles 8 and 12). The tax administration (SUNAT) oversees compliance with the tax and customs provisions (Article 13). The law declares the promotion of at least one ZEEP in each of Peru’s 24 departments and the constitutional province of Callao to be of national interest (Sixth Final Supplementary Provision). No ZEEP has been created under the new framework law as of April 2026.
The precise design of the regime is still subject to some uncertainty and will be finalised through implementing regulations.
Private operators
Each ZEEP is managed by a private operator, a legal entity authorised by MINCETUR to promote, construct, administer, and maintain the zone’s infrastructure and operations (Article 3.j). Operators may not have any economic link with users (i.e., businesses who invest and operate within the zone) and must commit to a minimum investment of 1 500 UIT (around EUR 2 million in 2026) within two years of signing the contract (Article 42 and Article 9.1.d.4). ZEEPs do not have a fixed end date (Article 10.1). A ZEEP must have a minimum size of 90 hectares, except in the Province of Callao, where smaller zones may be established subject to certain conditions (SD, Title III, Chapter II, Article 14)
Eligibility criteria
Users must be newly incorporated legal entities in Peru, or new branches, agencies, or permanent establishments of foreign companies (Article 3.o and Article 17). However, existing Peruvian entities can also become ZEEP users if they plan to carry out activities they have not engaged in previously in the domestic economy (Article 3.o). Users must make a minimum investment of 2 000 UIT within two years (around EUR 2.8 million in 2026). Upon endorsement from the Minister of Finance and Minister of Foreign Trade, the minimum investment amount can be modified for a specific user (Article 15.j).
Users must carry out their main income-generating activities within the zone, and the activity must account for at least 98% of total annual net income. In other words, only up to 2% of annual income can come from activities other than those for which the access to the zone was granted (Article 15.i). If the 2% threshold is exceeded, the income from auxiliary economic activities becomes subject to standard tax rules. The threshold can be modified upon the endorsement of the Minister of Finance and Minister of Foreign Trade. Businesses who are created by the same shareholders to replace a liquidated or dissolved business with the same activity (or as spin-offs or mergers of an existing firm in the zone) do not qualify for the tax benefits (Article 17). Users benefiting from the ZEEP regime may not simultaneously access other tax incentive regimes (Article 26).
Permitted and excluded activities
Permitted activities cover industrial, assembly, and support service activities that generate added value through the transformation of raw materials, subject to accreditation by MINCETUR and the relevant sectoral ministry (Article 4). The law explicitly excludes a range of activities from accessing the zone and its tax benefits. Users may not engage in mining, hydrocarbon extraction, or basic iron and steel production; banking, leasing and other financial services; arms and ammunition production or marketing; electricity generation; direct retail sales (within the zone) to end consumers; exploitation of intellectual property rights (Articles 5).
Annex 1 of Supreme Decree 005-2026-MINCETUR specifies additional excluded activities, such as the manufacturing of clothing or the processing of metals, but the decree empowers MINCETUR to modify the scope of these exclusions (Title I, Chapter II, Article 5.3-4).
An additional set of activities can enter the zone but would not qualify for the income tax benefits. This includes freights, logistics and warehousing; or fishing, harvesting and hunting. These activities remain eligible for the other tax benefits (and only the CIT incentive is not available), for example exemptions from VAT, excise taxes of import tariffs. Complementary activities are allowed within the ZEEP (e.g. cafeterias run by a separate user) and do not require a minimum investment. They benefit from the VAT and excise tax treatment under Article 23, but they are not eligible for income tax benefits. Logistics services may benefit from the income tax incentive (in addition to the other incentives) if their activities are supplementary to the core business activity (Article 21).
Tax benefits for users and operators
The core tax incentive is a reduced CIT rate schedule which applies for 25 years from the start of the operator’s operations (Table 6.1). The timing of the benefit period for each user is determined by the date the operator begins operations, not the user’s own start date (Article 14). However, another provision states preferential income tax rates apply from the year in which the full minimum investment is recorded in the Fixed Assets Registry (Article 9.1.e). This means that there is some uncertainty regarding the regime’s final design.
Note: The statutory rate in the regular economy is 29.5% in 2026.
Source: Law 32 449, Article 14.
Other tax benefits include:
Users may apply accelerated depreciation of up to 25% annually on qualifying fixed assets, effective from the sixth year of the asset’s life (Article 19). More clarity is needed about how this would be implemented in practice.
Goods and services purchased from abroad by ZEEP users are not subject to VAT, excise taxes (ISC), or import duties while the goods remain in the zone (Articles 23.4, 28.1, 34.1.a). However, if foreign goods later exit the ZEEP to the rest of Peru, the applicable tariffs and import taxes need to be paid (Article 31.1).
Transfers of goods and services between ZEEP users, carried out within the zone for permitted activities, are not subject to VAT or excise taxes (ISC) (Article 23.1).
Services provided by domestic suppliers to ZEEP users are treated as exports for VAT purposes, allowing the supplier to claim VAT refunds (Article 23.3). Goods purchased from domestic suppliers are not exempt from VAT, excise taxes, or municipal taxes (Article 31.2).
Domestic goods sold to ZEEP users are treated as exports for customs purposes from the supplier’s perspective and require only an invoice, not a customs declaration (Article 34.1.b).
This crates some uncertainty about the actual VAT regime that will apply in ZEEPs. For example, if goods purchased by firms in SEZs from the domestic economy remain subject to VAT (Article 31.2), it would be not consistent to treat them as exports (as specified in Article 34.
A dedicated customs regime governs the entry and exit of goods in ZEEPs (Article 28.1). Regulatory permits and authorizations normally required for restricted or prohibited goods do not apply within the ZEEP, except for sanitary, animal health, and phytosanitary controls (Article 29.3).
Monitoring, enforcement and transparency
MINCETUR can carry out periodic evaluations to verify compliance with investment, employment, and connectivity commitments (Article 10.1). If a user fails to meet any of the requirements for the income tax benefit, the benefit is lost for that taxable year and all subsequent years, with all income taxed at the standard tax rate (Article 15). SUNAT also has the power to revoke the special treatment in cases of non-compliance (Article 13). Infractions are classified as minor, serious, or very serious, with penalties ranging from fines to cancellation of authorization (Articles 52-55). The law includes a mandate for SUNAT to publish annually the list of beneficiaries, the total value of tax benefits claimed, investment made, and qualified employment generated (Article 60).
Source: Law 32 449, Supreme Decree 005-2026-MINCETUR.
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← 1. Lower CIT rates or CIT exemptions are referred to as income-based incentives because their tax benefit depends on profit, rather than the investment or expenditure made by a firm.
← 2. These countries include Argentina, Brazil, Colombia, Costa Rica, Dominican Republic, Ecuador, El Salvador, Paraguay, Peru and Uruguay.
← 3. SEZs are common in other OECD countries as well but tend to serve different purposes. In OECD countries outside the LAC region, they often function as logistics hubs, rather than as tools for building new manufacturing capacity, although some countries such as Korea and Japan have established specialised zones targeting high-technology sectors, while others (such as Enterprise Zones in the UK) use SEZs to revitalise regions (Kimura, 2025[43]).
← 4. See, for example, Supreme Decree 005-2019-MINCETUR, which refers to Legislative Decree 842, declaring “the development of the southern region of the country to be a matter of priority interest through the promotion of private investment in productive and service activity infrastructure, and for this purpose established the Export, Processing, Industry, Marketing and Services Centers (CETICOS) of Tacna, Ilo and Matarani”.
← 5. Three zones are referred to as Special Development Zones (ZEDs). They include the ZEDs Paita, Matarani, and Ilo. Besides, there is the Free Trade Zone and Commercial Zone of Tacna (Zofratacna).
← 6. Law 32 449. ZEEP stands for Zonas Económicas Especiales Privadas or Private Special Economic Zones. The creation of each new zone will have to be validated by Congress with a two-thirds majority.
← 7. According to the current version of the law, the tax reduction period would start from the date the zone starts to operate, rather than the date when a specific firm makes its investment in the zone.
← 8. Supreme Decree 005-2026-MINCETUR, Article 14.2.
← 9. Yet another article in the law stipulates that the tax benefit period would start when the qualifying investment has been recorded in the national fixed assets registry, which would suggest that the tax benefit starts when a particular user has made the investment.
← 10. Norm VII in the ”Título Preliminar” of Peru’s Tax Code, modified by Legislative Decree 1 521.
← 11. Law 32 449 and Supreme Decree 005-2026-MINCETUR.
← 12. In this chapter, additional investment (or additionality) is defined as investment that would not have occurred in the absence of the SEZ regime, even under a reformed standard tax system. This means that if the SEZ regime attracts investment that could have been brought into Peru's standard economy under a reformed CIT (along the lines of the recommendations made in this report), the investment would not be considered additional.
← 13. In other countries, the measured revenue forgone from SEZs can be lower because companies benefit from these incentives on top of other tax incentives or because the benchmark that is chosen to calculate revenue forgone is not the general regime but another special regime that is more widely available (e.g., trading companies in Uruguay).
← 14. An additional list of activities is excluded from SEZ treatment through a decree law published in April 2026 (Supreme Decree 005-2026-MINCETUR). The list excludes, for example, the production of clothing or the processing of metals, but the list can be modified at any time, according to Chapter II, Articles 5.3-5.4 in the Decree.
← 15. Article 4 in Law 32 499 defines broadly what type of activities are permitted, but it does not include a detailed list of sectors (e.g., which type of manufacturing would be permitted).
← 16. Among the 70 emerging and developing countries analysed in the OECD Investment Tax Incentives Database, 96% have in place at least one tax incentive that applies to a specific economic sector (OECD, 2025[7]).
← 17. This could affect, for example, the domestic logistics sector or firms specialised in importing goods from abroad and re-selling them to the domestic market.
← 18. As certain implementing regulations concerning the ZEEP regime have not yet been issued, these regulations will have to ensure that the regime’s final design remains in compliance with the BEPS Action 5 standard.
← 19. The drawback rate was adjusted repeatedly over the last two decades and evaluations have found that the benefits were concentrated among a small number of large firms (Chavez, Cusato and Pérez León, 2019[44]).
← 20. According to the 2024 update to the OECD Investment Tax Incentives Database, 58% of all tax incentives across 70 countries combine multiple eligibility conditions (OECD, 2025[7])
← 21. Law 32 449, Article 6.
← 22. Decree 309/018, Article 56.
← 23. Supreme Decree 005-2026-MINCETUR, Annex 2.
← 24. If firms accumulate tax losses during the 0% period, they could carry these losses forward to offset income in years when the rate increases. This also implies that transfer pricing rules need to be enforced during the 0% tax period so that firms do not accumulate excessive losses through transfer mispricing.