The Colombian government has issued Decree 1495 of November 19, 2021, which provides for the refund of Colombia’s 19% value added tax (VAT) on purchases made by visiting tourists. Visitors, upon departure may request refund of all VAT purchases made during their temporary stay in Colombia as long as those purchases exceed $108,924 COP, or roughly $40 USD. The maximum refund provided to tourists is $7,261,600 COP, or approximately $1,800 USD.
Under the new regimen, the government has to make good on refunds within 10 days from filing when using a third-party VAT refund service, or one month when a traveler applies for a refund directly.
Previously, only certain purchases were eligible for VAT refunds. Now, all product purchases qualify.
To apply for a VAT refund request, travelers must initiate the procedure at the time of departure from the country and before checking luggage. In the event that the applicant’s flight itinerary has a domestic stopover, the return request should be made at the port or airport where the baggage is checked with the airline.
The documents to be submitted are:
- Request for refund in the format and through the mechanism indicated (DIAN tax authority form)
- Electronic invoices for purchases made. The date of the invoice must be between the date of entry into the country and the date of departure.
- Documentation of the visitor’s status as a tourist (as opposed to visiting Colombia on a work or residency visa).
- Upon request, the traveler must demonstrate to the DIAN that the purchased goods for which the traveler is applying for a refund are actually leaving Colombia with the traveler.
- The foreign traveler is still responsible for any customs or duties in his or her destination country.
The VAT refund may be credited to the international credit card issued outside the country and indicated on the return request, or alternatively in cash.
“We seek to encourage tourism by expanding the coverage of the VAT refund benefit to foreign tourists through an agile mechanism. This will boost the purchases of national products by those who visit us from abroad. In this way, we continue to work for the reactivation of the country’s economy,” said the Ministry of Commerce, Industry & Tourism’s director of Tax Management, Julio Lamprea Fernández.
“As tourism was one of the activities most affected by the pandemic, we are working for its recovery on several fronts. We are committed to restoring its importance in the national economy. We have the destinations and the infrastructure, which is complemented by stimuli such as this tax refund. This is one more incentive for world travelers to visit us and contribute to safe economic reactivation,” said Minister of Commerce, Industry and Tourism, María Ximena Lombana Villalba (above photo).
For questions about VAT refunds, please do not contact Finance Colombia! Instead, contact Rodriguez & Asoc. Bilingual tax specialists in Colombia at [email protected] or click on the banner below.