Invoicing a Peru project from Colombia: an engineering firm case
To invoice a project in Peru from Colombia you need to settle three things: which country taxes the service under Andean Decision 578, how much the Peruvian client withholds at each milestone, and how the money is collected and converted. This illustrative case takes them in order.
A Colombian engineering firm that wins a project in Peru faces more than a dollar invoice. The Peruvian client may withhold income tax on every payment, an Andean rule decides which country taxes the service, and the firm still has to report the income and receive the money through an orderly channel.
At Soulbit Academy we present this as an illustrative, composite case, not a real client. The company, the project, the amounts, the timelines and the fees are assumptions used to show the order of decisions. They are not Soulbit prices or guaranteed outcomes.
The case: Vía Andina Ingeniería and a road supervision contract in Piura (illustrative profile)
Vía Andina Ingeniería S.A.S. is a fictional transport engineering firm in Medellín with 25 employees. It wins a contract with a fictional Peruvian regional roads agency to design and supervise the rehabilitation of a road corridor in the Piura region. The assumed contract value is 480,000 US dollars, paid in four equal milestones over 16 months.
The milestones are signing, delivery of the preliminary design, delivery of the final design and closing of the supervision phase. Two engineers will visit the site during supervision. Everything else is done from Medellín.
Before signing, the finance lead wants four answers. Which country taxes the service, how much the client will withhold at each milestone, whether site visits add risk, and how the money will be collected. This article follows that order.
Why should a Colombian engineering firm ask which country taxes the service before looking at the invoice?
Because the invoice is only the consequence. If Peru is the taxing country, the client withholds at source and the firm collects the net amount. The price has to be built on that answer, not on the invoice format.
What Decision 578 says about engineering services between Colombia and Peru
Decision 578 of the Andean Community sets the regime to avoid double taxation among its member countries, and both Colombia and Peru are members. Under Article 14, income of professional, technical, technical assistance and consulting firms is taxable only in the member country where the benefit of those services arises. The text is in the official Decision 578 document.
The article adds a presumption. Unless proven otherwise, the benefit arises where the expense is charged and recorded. In this case the Peruvian agency records the expense and uses the design and supervision in Peru, so the benefit arises in Peru.
SUNAT explains the point in Report 008-2012. When a technical services firm from a member country serves a company domiciled in Peru and the benefit arises there, the income is subject to Peruvian income tax to the extent it is Peruvian-source income. That holds even if the work was not performed on Peruvian soil, so design done in Medellín is not outside the rule.
On the Colombian side, DIAN Official Letter 8971 of 2025 analyses a case with Ecuador. It concludes that, under Article 14, such income is taxed only where the benefit arises and must be treated as exempt in the other member country. That is DIAN guidance for that scenario, not a guarantee for every contract. The wider treaty picture is in our guide to double taxation treaties.
Peruvian withholding, milestone by milestone
When a person or company domiciled in Peru pays or credits Peruvian-source income to a non-resident, it must withhold the tax and pay it to SUNAT as a final tax, according to Article 76 of the Income Tax Law as cited in SUNAT reports. The client withholds, and Vía Andina collects the net.
The rate depends on how the service is classified. In SUNAT Report 059-2014, the agency recalls that technical assistance carried a 15% rate while other non-resident income was taxed at 30%. That report analyses wording from before a reform, so it shows the logic and not the current schedule.
Whether an engineering service qualifies as technical assistance depends on each contract, and a Peruvian adviser should review that classification. For this case we assume a 15% withholding as of October 2026. The firm must confirm the current rate and formal conditions with a Peruvian adviser.
| Milestone (assumed) | Gross amount | Assumed 15% withholding | Net to Vía Andina |
|---|---|---|---|
| Signing (25%) | USD 120,000 | USD 18,000 | USD 102,000 |
| Preliminary design (25%) | USD 120,000 | USD 18,000 | USD 102,000 |
| Final design (25%) | USD 120,000 | USD 18,000 | USD 102,000 |
| Supervision closing (25%) | USD 120,000 | USD 18,000 | USD 102,000 |
| Contract total | USD 480,000 | USD 72,000 | USD 408,000 |
Peruvian withholding is final and reduces the net amount Vía Andina collects. Because the client pays it to SUNAT in Vía Andina's name, the withholding certificate is the proof of tax paid in Peru, and the firm's accountant decides whether it has any effect on the Colombian return. The firm should request it at each milestone and file it with the contract and the invoice.
Whether the price is gross or net of withholding is a negotiating point. A clause under which the client bears the withholding (a gross-up) changes the number that reaches the firm. If the contract is silent, the client withholds from the agreed price.
What is the role of the tax residence certificate?
The Peruvian client needs evidence that the firm is resident in Colombia to apply Decision 578 or a treaty. In a report on another treaty, SUNAT said the non-resident must hand over its residence certificate for the treaty benefits to be considered. For a Decision 578 case, confirm with your Peruvian adviser which certificate they accept.
Site presence and permanent establishment risk
Decision 578 has a different rule for business activities. Under Article 6, as cited by SUNAT, profits from business activities are taxable only in the member country where they were carried out. If engineers spend long periods on site, part of the activity could be seen as carried out in Peru.
This matters for two reasons. First is classification: if the site work is treated as a business activity in Peru rather than consulting, the taxing rule changes. Second, a stable presence with its own office or continuous staff can lead the Peruvian authority to question whether a permanent establishment exists.
There is no number of days that fits every case, and we do not give one because it has not been verified for this contract. What can be done is to organise the facts an adviser will review.
| Fact to review | Lower risk | Higher risk |
|---|---|---|
| Length of presence in Peru | Short, scheduled visits | Resident team for months |
| Premises | No own office | Office or camp in the firm's name |
| Who directs staff | The firm from Medellín | A local manager who can hire |
| Scope of service | Design and quality supervision | Execution and control of works |
| Contracts signed | By the client | By the firm in Peru |
Vía Andina decides to limit supervision to scheduled visits by its two engineers, keep team management in Medellín and open no office in Peru. That choice is made before signing and written into the contract.
What stays open in Colombia: VAT, income tax, 4x1000 and foreign exchange
Peruvian withholding does not close the operation. On the Colombian side, the services export invoice has its own VAT treatment, which depends on the service being used exclusively abroad and on the supporting documents. We do not develop it here.
For income tax, Vía Andina must report the income in Colombia and decide with its accountant how to treat the tax withheld in Peru in light of DIAN Official Letter 8971 of 2025. That decision turns on the contract facts and has no general answer.
The 4x1000 financial transaction tax does not hit the money coming in, but its later use. When the firm uses the balance to pay payroll or suppliers in Colombia, the tax may apply. It is explained in our guide to the 4x1000.
Then there is the foreign exchange regime. Which operations must go through the exchange market and which can be handled through a compensation account is set by Banco de la República rules, summarised in the exchange regime guide for companies. Before choosing the collection channel, the firm should confirm what applies to its operation and which exchange filing is due. The full corridor, with suppliers and payroll, is in the Andean corridor between Chile, Peru and Colombia.
Collecting in dollars or soles, and where Soulbit fits
The contract is in dollars, the simpler option for a firm whose main costs are Colombian peso payroll and some travel. If the client paid in soles, the firm would carry the risk of moving from soles to dollars and then to pesos, with two conversions instead of one.
Within Soulbit V1, the client can pay through a payment link or a collection QR code using USDC or USDT, and the firm keeps the balance in institutional custody. When it needs pesos, it asks for an OTC quote on request, and the payment goes over the local banking rail in Colombia to the accounts it names. Conversion is not automatic: it is requested and quoted.
Can the Peruvian client pay in stablecoins and still meet its duty to withhold?
The duty to withhold depends on the nature of the income and the payer, not on the means of payment. Whether a client agrees to pay in stablecoins is its own decision, and it should confirm with a Peruvian adviser how to record it. The firm can also offer a dollar bank transfer.
What Soulbit V1 delivers in this case and what it does not
Soulbit V1 works with USDC and USDT stablecoins and with fiat balances in USD, EUR and GBP. It offers payment links, collection QR codes, OTC conversion by quote on request, institutional custody with AML/KYT monitoring, and payouts over the local banking rail in Colombia only. Soulbit is a custodial platform.
It does not include soles or local banking rails in Peru, so a collection in soles or a payment to a Peruvian account is out of scope. It does not calculate or file taxes, does not issue the withholding certificate and does not replace tax or exchange advice. It also offers no cards, yield or native mobile app.
For a firm like Vía Andina, the useful part of V1 is the money leg: collect through a link or QR, hold the balance in custody until it decides when to convert, and pay out in pesos over the Colombian banking network. The guide to payment links for international collections explains the first step.
Frequently asked questions
How much tax does Peru withhold on engineering services billed by a Colombian company?
It depends on how the service is classified and on whether Decision 578 applies. SUNAT reports describe a 15% rate for technical assistance and 30% for other non-resident services. The current text of the Income Tax Law and its formal conditions should be confirmed with a Peruvian tax adviser before the price is agreed.
What does Decision 578 say about consulting services between Colombia and Peru?
Article 14 says income of professional, technical, technical assistance and consulting firms is taxable only in the member country where the benefit of the service arises. Unless proven otherwise, that is presumed to be where the expense is recorded. If the client is Peruvian and uses the service in Peru, Peru is the taxing country.
Does Colombia tax again the income Peru has already taxed under Decision 578?
DIAN Official Letter 8971 of 2025, which analyses a case with Ecuador, says this income is taxed only where the benefit arises and must be treated as exempt in the other member country. The company should document the facts and confirm with its accountant how to report it, because the outcome depends on the contract.
Does sending engineers to the Peruvian site create a permanent establishment?
It can create risk, and there is no single answer. Length of stay, who directs the staff, whether there is a fixed office and what the applicable rule says all matter. Decision 578 and Peruvian law apply their own tests. Review them with a Peruvian adviser before moving staff there for long periods.
Does Soulbit calculate the Peruvian withholding or the Colombian VAT treatment?
No. Soulbit does not calculate taxes or file returns in any country. That stays with the company and its advisers. Soulbit handles the movement of money: the payment link or collection QR, OTC conversion by quote on request and payout over the Colombian local banking rail, with institutional custody of the balance.
Want your company to add stablecoins to its operations?
Join the Soulbit waitlist and start paying payroll, collecting and managing treasury without SWIFT.
Join the waitlist