Argentina Is Eliminating VAT On Hotel Stays For Foreigners

Different countries seem to take different approaches to generating revenue from tourism. You have some countries that try to stimulate tourism by making it easier and cheaper to visit the country, while you have other countries that try to generate revenue through tourism by charging people to visit, like with an entry fee. I think it’s no secret which strategy I prefer. 😉

Well, this week Argentina has announced a very tourist-friendly move.

Argentina’s president has signed an executive order under which foreign visitors will be refunded the VAT (value added tax) paid on hotel services using foreign debit or credit cards. Best of all, the reimbursement will be “direct and automatic,” meaning you don’t have to go through any hoops or forms to request the reimbursement.

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Park Hyatt Buenos Aires

Argentina’s 21% VAT has long been among the highest out there. While hotels in many cities/countries have additional charges around 20% or so, often 10% of that is a service charge. So a 21% outright VAT is high.

argentina-hotel-vat

This development was announced in connection with World Tourism Day, as Argentina wants to boost their tourism industry, after a rough couple of years. They hope that this change will encourage more people to visit, and will boost jobs in the tourism industry.

Keep in mind that in the past Argentina had a “black market” exchange rate which was significantly better than the official one, though as far as I know that has greatly been reduced lately, due to the fall in the value of the Argentinian Peso.

The problem is that many of the top international hotel chains in Argentina continue to quote prices in USD, and rates in USD haven’t changed much over the past few years. In practice this means that the rates at these hotels have gone up substantially. For example, the Park Hyatt Buenos Aires continues to charge $500+ per night…

park-hyatt-buenos-aires

Bottom line

This is a great move on the part of the Argentinian government, and shows a real attempt to boost tourism. This should help many travelers save 21% on their hotel stays in the country. This combines nicely with the drop in rates at hotels that are priced based on the Argentinian Peso, given how much the currency value has fallen.

Unfortunately for many international hotel chains, prices continue to be pegged to the USD, which means the rates at these hotels in local currency have largely gone up ~30% over the past year.

Will Argentina eliminating the VAT on hotels encourage you to visit?

(Tip of the hat to No Mas Coach)

Comments

  1. Buenos Aires has TONS of amazing hotels, the majority of which are not international chains but rather local boutique hotels, such as the Bobo or the Vain in Palermo. Those are always by far the best values and best neighborhoods to visit and stay in anyway. This would definitely encourage me to visit more.

  2. Colombia already has this exact VAT refund as long as you enter for tourism reasons rather than business reasons. No paperwork required and it’s taken right off at checkout.

    Ecuador has the same thing too, but you pay the full amount, file paperwork at the airport, and get a refund to your credit card (MC or Visa only) a few months later.

  3. Here’s a tip – bring lots of US currency. The “official” exchange rate is always 50% less than the “real” exchange” rate. In exchange for hard currency, vendors and independent hotels will give you between 8 and 10 for 1 USD. If you charge it, you will get only 6 to 1 (or whatever it is at the time).

    We were there a few years ago when it was officially 4-to-1. Our hotel gave us 6-to-1 and knocked an additional 30% off our bill for paying in US dollars.

  4. @Matt… you have your news some 9 months delayed. This was the case in 2015, not anymore. Also US$ 1 is now close to AR$ 15.

    Now in terms of policy, I think this is absurd. The VAT is a tax on goods and services and if the service is “consumed” within the country the tax should apply.

  5. Peru and Colombia have had this “no VAT for foreigners at hotels” thing for many years. But just try to find a hotel that knows about it. And even at the Aloft Hotel in Bogota (part of Starwood)… even the manager didn’t know that foreigners don’t have the pay the VAT. Having the VAT automatically refunded when you use a foreign credit card is the best way. When I was in Uruguay several years ago, they were already doing that in restaurants. I tend to stay at AirBNB places nowadays, so I don’t think this “no VAT” will affect me, but the fact that Argentina suspended the ~$150 reciprocity fee for US Citizens has made me want to return to Argentina soon.

  6. That’s great news for all of you who want to visit our country so enjoy! Also there is the 160 USD visa reciprocity waiver so some nice savings there, hopefully it will encourage foreigners to visit. Although prices are otherwise really high here and don’t expect to do much shopping, also check out non chain hotels because anything with the Sheraton, Hyatt, Four Seasons or even Hilton brand is super expensive.

  7. Please try aerolíneas argentinas i has read the posts about how bad was the buisness class but now it has new planes with good service

  8. Lucky, check out Park Hyatt`s Mendoza. The price is so low, and the wineries are such a fun thing to do with a couple of days to spare there.

    Check that out!

  9. I agree on PH Mendoza, really any of the wineries near mendoza are great (e.g. Entre Cielos). Bariloche was also a really nice place to visit.

  10. Just came back from Buenos Aires. Wish they had introduced it a week ago :-))). When does this go into effect?

  11. “Unfortunately for many international hotel chains, prices continue to be pegged to the USD, which means the rates at these hotels in local currency have largely gone up ~30% over the past year.”

    Not just major international hotel chains. Argentina should be very inexpensive right now, due to the currency devaluation. But checking on Trip Advisor, admittedly only going down to #100 on the list, every property is quoting in $. Even skipping the booking engines, googling the hotels own website, and asking in Spanish, every one is strictly in US $.

    What a scam ! The farther the currency falls, the greater the profit the hotel makes. Since the peso was at 4 per $ in 2011, and now is at 15, that means the cost of a hotel room has increased by almost 400 percent in the last 5 years.

    That being the case, Argentina is still cheaper than Sardinia, but not cheaper enough than much nicer and safer European tourist locations. Getting rid of the expensive Visa was a good move, and now refunding the VAT is even better. But I’m not about to pay these inflated prices for a substandard (compared to Europe/Asia) hotel. Case in point, the Park Hyatt is charging $550 for a basic room next month. Yes, that’s cheaper than the Park Hyatt in Paris, but then again, staying there won’t be comparable to being in Paris..

    Most likely if someone has a friend in Buenos Aires who can book a room for you at the “local” rate, it would be a much different matter. But the “gringo” rate is no bargain, and their rooms can stay empty for all I care. 😉

  12. Chile and Peru charge no VAT on hotels for foreigners. I read above about Ecuador but since I used HHonors hfor Hilton Quito points it was not an issue. In Buenos Aires I stayed at Anselmo and Hilton, both cheap enough, VAT or no VAT. Sheraton Iguazu was a different matter altogether but it is an awesome place. YES, I’ll be going back!

  13. Robert I am sure this won`t be of much use to you but probably those really high rates are due to Polo High season. During October and November those Hotels will surely be sold out even at that prices because people from around the world travel to Buenos Aires for the Polo tournaments.
    Regards,

  14. As others mentioned, this is fairly common in Latin America. Chile has had the same policy for ages, Peru and Colombia followed more recently. Generally. o price bikes were experienced, at least not in areas which also attract a local customer base and expats (expats are generally not excempt, as law specifies an annual maximum stay in the country).

    The other question is whether it’s fair to local customers, in particular middle class. I have a number of middle class Chilean friends who firmly dislike it for understandable reasons …

  15. I don’t think this will increase tourism one bit. The visa waiver is a great idea as eliminating a somewhat significant up front cost is much different than eliminating a mostly hidden back end cost. Never when contemplating visiting a country have I taken vat taxes into consideration but I know many people who have crossed Brazil off the list just because of the visa cost.

  16. The reason the black market is pretty much gone isn’t because the currency devaluation. It’s basically due to policy changes from the new government allowing Argentinians to buy USD thus eliminating the need to buy it on the black market.

  17. @ Robert Hanson

    Inflation is around 30% which means the running costs increase by 30% every year. There is no scam and hotels, like many other businesses, are being strangled.

  18. Interesting stuff. Me and the Mrs have just arrived in Argentina – how do we actually receive the refund? We will be crossing the boarder over land into chille. So far paid for one hotel and the owner had no idea of a waiver on VAT. Any recommendations on how to manage this? We’re here for a month so it will make a huge difference. Many thanks.

  19. It hasn’t come into effect yet! We’re waiting for the confirmation but that won’t be for another few weeks yet. After that, how long it will take to actually function properly is anyone’s guess…

  20. When will it come into effect? Just tried booking a hotel on hotels.com and I get the 21% VAT to pay right now.

  21. According to the government, any time now. Maybe November, maybe December. Unfortunately this is Argentina so maybe January, maybe later.

  22. Any update as to whether this is in effect yet? In Argentina now and no hotels seem to be refunding VAT. Thanks for the info!

  23. It’s been in effect for over a month now. All hotel rooms paid for on a foreign credit card should be IVA free (21%). The IVA is deducted when you pay, so it’s very simple and you don’t have to chase anyone to get it back at a later date. The hotel will need a scan or clear photo of the ID page of your passport and the passports of everyone else staying under your reservation. All must be foreigners. Not surprised that some hotels aren’t volunteering this information (sadly) but if you tell them, they will have to comply.

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