By Felipe Salinas, Tax Director at CCL Auditores Consultores.
Read the letter in Diario Financiero.
Dear Editor,
As reported by Diario Financiero, the Government has introduced measures to boost tourism, including VAT refunds on purchases made by foreign visitors and increased resources for promoting Chile.
In this regard, it is important to recall that hotel and lodging services are already tax-exempt for foreign visitors to Chile. Therefore, the VAT reduction will apply only to movable goods that tourists can take back to their home country (such as technology, clothing, among others).
In this context, the information published by this outlet indicates that approximately 15% of tourist spending could potentially correspond to goods eligible for exemption under this rule, which in practice could benefit from VAT refunds. This is a very positive figure, as Chile will align with the standards in this area of other countries in the region and even those of the European Union.
Despite the above, and the increased attractiveness that our country will gain as a tourist destination, it is important to note that, as a counterpart, a 1.25% tax on lodging will be introduced—likely the most expensive component of travel. So, are we really talking about a tax reduction? Or does it appear more like a compensation and a restructuring of the tax system? I leave that to your consideration.