Argentina to Refund Value Added Tax to Foreigners Paid on Hotel Services

Casa Rosada

If enjoying a steak with a glass of Malbec after taking in a day at Iguazu Falls is not enough of an incentive, the value of visiting Argentina as a tourist keeps getting better and better due to the confluence of a trifecta of reasons.

Argentina to Refund Value Added Tax to Foreigners Paid on Hotel Services

Foreign tourists who visit Argentina will receive a direct and automatic reimbursement of the value-added tax — also known as VAT, which can be as much as 21 percent — paid on lodging services with debit cards or credit cards issued outside of the country in an effort to attract more visitors to Argentina; as well as boost businesses which cater to the tourism industry.

Mauricio Macri — who is the current president of Argentina and signed the executive order at the Casa Rosada presidential palace on Tuesday, September 27, 2016 — estimates that the initiative will create 8,000 jobs and positively affect 120,000 new tourists who would spend approximately 90 million dollars.

The executive order is expected to be finalized and become effective in approximately two months.

Other Financial Incentives to Visit Argentina

Tourists from outside Argentina have been able to enjoy a refund of the value-added tax paid since 2001 — but only the purchases of goods have been covered under those regulations.

The refund of the value-added tax paid on goods and hotel services is in addition to the elimination of the reciprocity fee 0f $160.00 which Americans were required to pay in order to visit Argentina as of last month.

At greater than 15 Argentine pesos to the dollar, the current exchange rate for Americans is the best in at least one year — further bolstering the value of a trip to visit Argentina.

Summary

The refunds of payments of the value-added tax — combined with the elimination of the reciprocity fee and the favorable exchange rate — significantly increases the appeal of Argentina to foreign visitors and the flow of hard currency, boosting tourism businesses and creating jobs.

This action by the government of Argentina underlines the topic of this article, which argues in favor of why more countries should consider relaxing their visa fees and requirements for foreign visitors. Argentina was arguably forced to offer this financial incentive to tourists to remain competitive to attracting visitors because neighboring countries — such as Colombia, Chile, Peru, Uruguay and Ecuador — already offer similar financial incentives to foreign tourists.

By reducing — or, better yet, eliminating — the fees to secure a visa and refund the value-added tax for a visitor, the economic benefits could more than make up for it. That $160.00 per person for a visa to visit Argentina — plus the value-added tax of 21 percent — could instead go towards patronizing businesses and other areas of the general economy, which in turn would increase tax revenues for the government as one of many benefits. Charging exorbitant taxes and visa fees can actually do more economic harm to countries in the long term than help them.

If you have ever wanted to dine on some of the best beef in the world, now is the time to head on over to Argentina and enjoy a great steak with a domestic Malbec — without draining your bank account — as well as enjoy all of what the country has to offer…

…and it is now springtime in Argentina — perfect for escaping the upcoming winter weather if you are based in the northern hemisphere.

Photograph ©2005 by Brian Cohen.

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