In order to support the tourism industry, Colombia through its Directorate of National Taxes and Customs – DIAN (equivalent to the IRS in the US, or Revenue Canada), will return to foreign tourists in the country 100% of the sales tax they pay for the purchase of goods and services taxed while in Colombia. As the Value Added Tax, (IVA in Spanish) is 19% in most cases, this can add up to a considerable amount.
It is important to always ask for an electronic invoice, as cash register or handwritten receipts are non-reimbursable.
Foreign tourists may request the refund of sales tax – VAT for the purchase of taxed movable property as long as the value of each sales invoice is equal to or greater than three (3) units of tax value – UVT (equivalent to $38,004 pesos in 2022 and $42,412 in 2023. The maximum refund is 200 tax value units, so in 2023 that would be $8,482,400, or over $1,700 USD as of publication.
Colombian residents are not eligible for VAT refunds. The goods purchased must be leaving the country with the foreign visitor, and the purchase must be supported by electronically traceable invoices. In other words, the retailer would have submitted the purchase to the DIAN electronically. Most major Colombian retailers do this automatically, as they are required to by law, for all retail transactions. Eligible invoices and receipts will have a CUFE code that starts with CUFE: Followed by a long string of letters and numbers. It is important to always ask for an electronic invoice, as cash register or handwritten receipts are non-reimbursable.
There are traveler service points for processing refunds located at major airports, seaports and land border crossings. Look for either DIAN offices, or self-service kiosks before security checkpoints that will be staffed by either DIAN officials, or Global Blue, their outsourcing contractor.
Allow yourself extra time when traveling to complete the refund application procedure at the airport or border crossing. You will need:
- The refund request form, available on-site
- Passport and/or other appropriate identification
- The actual products that you purchased and are taking with you out of Colombia
- The physical or emailed electronic invoices
The DIAN may take up to one month to process refunds, which in most cases will be returned via the credit card the traveler used to make the purchase. VAT refunds only apply to merchandise, not services.
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.
This guest article is published as a courtesy to readers. Finance Colombia is a news publication and does not provide financial, legal, or tax advice. This information is provided as general news and the reader must consult is or her own counsel in order to make qualified, informed decisions. Information, rules, procedures, and laws may (and almost certainly will) change, and Finance Colombia assumes no responsibility for accuracy or timeliness of information.