Tax Stability Guarantee
• The State guarantees the Contract holder that the tax and currency exchange systems in force at the time of the signature of the contract shall remain unchanged during the lifetime of each contract.
• The Central Bank on behalf of the Peruvian State, guarantees the free availability of foreign currency.



Income Tax
• Income tax for hydrocarbon activities is 30%.
• Peruvian tax legislation allows losses to be carried forward for the following four years.
• The Contract holder can offset tax losses suffered in one contract against income generated in another contract.



Value Added Tax (Sales tax)
• Value Added Tax of 18 % applies to sales of goods and services.
• VAT affects only end users and does not apply to certain exempted goods. Hydrocarbons legislation guarantees the transferable nature of the VAT.



No Remittance Tax
• There is no tax on income and capital gains remitted abroad. Hydrocarbons legislation grants the freedom to enter and repatriate funds to and from Peru. No permits are required.

Import and Export Tax Exemptions
• The imports of most of the equipment and supplies required for activities in the exploration phase are free from any taxes.
• Hydrocarbon exports are exempted from all taxes.

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Accelerated Amortization
Tax legislation allows all exploration and development expenses incurred as well as all investments made by the Contract holder from the beginning of the contract until Date of Commencement of Commercial Extraction to be amortized under the 5 year straight line method. This method allows a rapid recovery of intangible and tangible investments such as those incurred in drilling wildcats and development wells, geological and geophysical studies, etc., with the consequent tax benefit for the Contract holder.



​Pipeline Rates
In keeping with national legislation any individual or corporation may operate a pipeline. The law establishes the maximum rate that the Contract holder can be charged by concessionaires. The rate takes into account operating expenses, depreciation, an after-tax rate of return on investment and working capital as well as the volumes to be transported in such a way as to allow the concessionaires to recover their costs and to obtain a reasonable profit.



Royalty
• The royalty will be paid on the value of the crude oil and condensates calculated on the basis of a basket of hydrocarbons minus transportation and storage expenses. In the case of natural gas, the royalty will be applied to the selling price less transportation and storage expenses.
• Peruvian regulations allow Perupetro to negotiate different royalties for cases including non conventional operations, or when a contract becomes unfeasible due to the lack of infrastructure required to transport hydrocarbons.



Free Availability of Hydrocarbons
The hydrocarbons produced and measured in the contract area belong to the Contract holder. The Contract holder may freely sell or dispose of production in keeping with the contract. There are no quotas assigned for the domestic market.​