In the rapidly growing world of international e-commerce, taxation plays a critical role in determining the profitability, compliance, and operational complexity of cross-border transactions. For businesses and consumers in both the United Kingdom and Peru, understanding the implications of VAT (Value-Added Tax) and IGV (Impuesto General a las Ventas) is essential for effective trade and financial planning. This article explores how VAT and IGV impact international e-commerce operations, comparing both systems and highlighting key considerations for businesses operating in these two regions.
Understanding VAT and IGV: An Overview
Value-Added Tax (VAT) in the UK
VAT in the United Kingdom is a consumption tax charged on most goods and services sold domestically and internationally. As of 2025, the standard VAT rate is 20%, with reduced rates of 5% and 0% applied to specific goods and services. Businesses registered for VAT must charge this tax at the point of sale and remit it to HM Revenue & Customs (HMRC).
Impuesto General a las Ventas (IGV) in Peru
IGV is Peru’s equivalent of VAT. The standard IGV rate is 18%, composed of 16% for the general sales tax and 2% for the municipal promotion tax. Like VAT, IGV is applied at each stage of the supply chain and ultimately borne by the end consumer. Businesses in Peru must register with SUNAT (Peru’s tax authority) to collect and report IGV.
Impact on International E-Commerce: UK Perspective
1. VAT on Cross-Border Sales
For UK-based e-commerce retailers selling to customers in other countries, VAT rules vary depending on the destination country. Post-Brexit, sellers must handle VAT differently for EU and non-EU countries. For example:
- EU Consumers: Sellers may need to register for VAT in each EU country or use the EU’s One-Stop Shop (OSS) system.
- Non-EU Consumers: UK VAT may not be charged, but import taxes in the destination country still apply.
2. VAT on Imports
UK e-commerce businesses importing goods must pay import VAT, typically at the same rate as the domestic VAT (20%). However, they may reclaim it as input tax if registered.
3. VAT Registration Thresholds
E-commerce businesses must register for VAT once their taxable turnover exceeds £85,000 (as of 2025). For international sellers entering the UK market, there is no threshold – VAT registration is mandatory.
Impact on International E-Commerce: Peru Perspective
1. IGV on Cross-Border Transactions
In Peru, IGV applies to the importation of goods and certain digital services from abroad. Peruvian consumers purchasing from international e-commerce platforms may have to pay IGV upon delivery or as part of the checkout process if the platform collects it.
2. IGV on Digital Services
As digital commerce expands, Peru has taken steps to apply IGV to digital services provided by non-resident companies, such as streaming platforms, software subscriptions, and cloud services. SUNAT requires local financial intermediaries to withhold IGV in certain cases.
3. IGV Compliance for Foreign Sellers
Foreign e-commerce companies targeting Peruvian customers may need to comply with local tax rules. While not always mandatory to register in Peru, platforms or payment processors may handle IGV collection on their behalf.
Comparing VAT and IGV for International Sellers
| Feature | VAT (UK) | IGV (Peru) |
| Standard Rate | 20% | 18% |
| Tax Authority | HMRC | SUNAT |
| Applies to Imports? | Yes | Yes |
| Applies to Digital Services? | Yes | Yes |
| Foreign Seller Registration | Required (no threshold) | Conditional / Via intermediaries |
Key Challenges for E-Commerce Businesses
1. Tax Complexity and Compliance
Navigating two distinct tax regimes increases compliance burdens. UK businesses must understand IGV implications when selling to Peru, and vice versa. This includes understanding filing obligations, tax invoicing rules, and refund mechanisms.
2. Price Transparency and Customer Experience
International buyers may face unexpected VAT or IGV charges at checkout or delivery, leading to cart abandonment. It’s crucial for e-commerce platforms to display all taxes clearly and integrate accurate tax calculations.
3. Currency and Tax Fluctuations
Currency fluctuations can impact the effective tax burden, especially when exchange rates shift between GBP and PEN. Businesses need to adapt pricing strategies to remain competitive while maintaining compliance.
Leveraging Online Calculators for Tax Accuracy
To minimize tax errors and streamline invoicing, e-commerce businesses can utilize digital tax calculators. These tools ensure that the correct VAT or IGV rate is applied automatically based on transaction type, location, and product category.
For Peruvian sellers or consumers wanting accurate IGV calculations, tools like calculadora IGV simplify the process. Users can instantly compute the base price, tax amount, and total payable amount in line with SUNAT regulations.
Similarly, UK businesses can use VAT calculators tailored to HMRC rules for both domestic and international sales scenarios.
Opportunities in Cross-Border E-Commerce
Despite the tax-related challenges, international e-commerce between the UK and Peru offers numerous growth opportunities:
- Digital Products and Services: IGV and VAT rules now include digital goods, opening new markets for SaaS, online learning, and entertainment platforms.
- Dropshipping and Warehousing: With tax compliance tools in place, businesses can explore efficient fulfillment models.
- Market Expansion: Understanding local tax laws allows businesses to confidently enter new markets and offer competitive pricing.
Final Thoughts
As international e-commerce continues to evolve, VAT in the UK and IGV in Peru will remain central elements in business strategy and regulatory compliance. Businesses aiming to trade across these borders must prioritize tax education, compliance tools, and transparent pricing to thrive.
By leveraging reliable tools like a calculadora de IGV peru, businesses and consumers alike can ensure accuracy, save time, and stay on the right side of tax laws. Staying informed and proactive is the key to succeeding in the competitive global marketplace.
also read: Realtors in Oceanside CA: Trusted Experts for Your Home Journey
