By Thomas Graham
Foreign visitors to Colombia no longer have to pay the country’s 16% sales tax for certain items. Here is how a visitor is able to get their maximum of $1000 equivalent in tax returns.
The 16% sales tax has been removed from tourism-related services in a bid to encourage Colombia’s growing tourism industry. The reduction only applies for visitors, not foreigners that reside in the country.
This blanket measure will apply to services offered by travel agencies, tourist guides and accommodation agencies, when they are not part of packets or plans sold by agencies or hotels registered with the National Register of Tourism.
Sales tax at franchise restaurants, road transport agencies, and car rentals, among other services, will also be returned.
The law states that “foreign visitors who are not residents in Colombia will be able to get the VAT reduction for these services when the sum, including VAT, is equal to or more than ten Tax Value Units.”
A tax value unit is a government-fixed value, currently set at approximately $10 (COP30,000). Therefore, the VAT reduction will only be applicable for sums of more than roughly $100.
To then claim the sales tax reduction, a foreign tourist must on departure from Colombia personally present “the duly completed return form, their passport and a photocopy of a document proving their immigration status.”
According to the national government, the reduction will then be made by means of a payment to the leaving visitor’s international credit card. The cap of what can be returned per person was set at 100 tax value units, approximately $1000.
In spite of a general economic slowdown, Colombian tourism is booming. More than 2.5 million tourists visited Colombia in 2015, whereas in 2005 the total was less than 900,000.
The decline of the peso and the improving security of the country appear to be behind the increase.
To the original source: http://colombiareports.com/tourists-colombia-now-exempt-16-sales-tax/