Argentina becomes 21% Cheaper to Visit
As if we needed any more reasons to travel more, it just became even cheaper to visit Argentina.
Argentine President Mauricio Macri signed an executive action allowing for the reimbursement of VAT tax on accommodation to foreign tourists, officially making staying in Argentina 21% cheaper. The signing of the law took place at the Casa Rosada, where the executive office resides, and it was communicated during ongoing events related to the World Tourism Day.
It is estimated that these changes will go into effect in the lapse of two months, once it is ratified by the Ministry of Economic and Public Finances, and is expected to increase the flow of international tourists by 120,000 a year, or around US$90 million a year.
Argentina has been reimbursing VAT to foreigners on purchase of goods since 2001, via filing a tax refund form that must be validated and stamped by a customs officer upon leaving the country. The new law, however, calls for a ‘direct and automatic’ reimbursement of the VAT amount by the entity collecting the tax for all purchases of accommodation services charged to a foreign credit or debit card. The refund applies to purchases made either directly with a hotel or via agencies selling packages including accommodation.
The initiative is aimed at creating new jobs in the tourism industry, growing the amount of foreign tourists and their spending in the country, and revitalizing the industry. It is worth noting that, year to date, the amount of foreign tourists visiting Argentina has seen a dip of 6.3% compared to the same period last year.
Several South American countries already have some tax reimbursement benefits for foreign tourists, like Colombia, and others instead opt for exempting foreigners from VAT collection altogether, like Chile and Uruguay. The difference between those systems is that Argentina WILL collect the tax, then automatically reimburse it. This will allow the government to curb tax evasion, as the benefit only applies to transactions done through debit or credit cards and, as all purchases in Argentina, involves the issuance of electronic receipts via a receipt printer that live feeds into their tax agency.
Hotels in Argentina don’t particularly run cheap (unless it’s with points or through a BRG), but this is great news to anyone who wants to visit the country and save 21%!