No IVA for foreigners since 1.1.2007!

manu1999 says on Mar 21, 2007, 15:26:

Are you serious? That is fantastic!Is it the same for flights?

0 funny, 0 helpful.

suizo says on Mar 21, 2007, 15:30:

Yeah! Same for domestic flights. Maybe even international if you buy in Colombia...but not sure. I experienced that some hotels will tell you that you have to reclaim the IVA at the airport when you leave the country. But I insisted and then they agreed to exclude IVA in the first place...

0 funny, 0 helpful.

bradenmiami says on Mar 21, 2007, 15:44:

Where? Anybody know where you can get documentation of this that can be printed to carry? It would be nice to have defense if someone argues it.

The "lovemedellin website" is a piece of crap made by some moron who has only been to Medellin once...you'd be better off reading the Lonely Planet advice from a guy who never even came here!

0 funny, 0 helpful.

ds says on Mar 21, 2007, 16:18:

Are you sure? Tourist services have been tax-free since some years, under certain circumstances:

They have to be paid in foreign currency AND hotels, restaurants or travel agencies not charging IVA have to be registered in the national tourism registry. - (Very few are!)

This means: If you book a hotel or flight on the web, pay the price in dollars and the hotel is registered in the entity above, they may not charge IVA. If you walk in and pay in pesos you still have to pay tax!

Maybe this changed this year, but I didn't hear or read about this. Tax system is mad in Colombia, impossible to catch up.

(If you understand colombian accounting terms you might want to read this article, page 8 talks about tourism and tax:

http://www.anaya-anaya.com/pdf/boletin05-2005.pdf

0 funny, 0 helpful.

suizo says on Mar 21, 2007, 16:20:

Hmmm... Didn't find anything on the net. However, the Intercontinental in Cali, the Park 10 in Medellin and the Cartagena Estelar Hotels all agreed to discount the 10% IVA. Only the Dann Carlton in Barranquilla keeps on telling me that they have to charge the IVA because it's a national tax. After insisting they then tell me that they can't change the billing because of their automated system...bullshit.

0 funny, 0 helpful.

jay1234 says on Mar 21, 2007, 16:23:

how about a legal advice of the week on this? Anyone have a link to the law on this? Or a government website or something to prove this?

0 funny, 0 helpful.

tomtom33 says on Mar 21, 2007, 17:25:

If this is correct, which I doubt, Colombia has her head further up her ass than I thought.

I paid IVA at a hotel in Medellin in Jan. of this year, and I paid using a US-issued credit card. Of course I am not a tourist since I live in Cartagena. But I am a foreigner. The more I think about it. The more I wonder who would even think of passing such a screwy law. Are you still a foreigner within the meaning of the exemption if you have a one-year cedula? How about a permanent cedula?

0 funny, 0 helpful.

spigrimace says on Mar 21, 2007, 17:45:

They probably dont know either So they probably gave you the 10% discount and put the transaction "abajo" in their system so it won´t be reported on their books to DIAN.

0 funny, 0 helpful.

Gator says on Mar 21, 2007, 20:00:

New To Me. Also a quick read of the DIAN site, http://www.dian.gov.co/, resulted in no information. Since I am a permanant residence I doubt it would apply to me.

"Brevior Sltare Cum Deformibus Mulieribus Est Vita!" .

"Brevior Sltare Cum Deformibus Mulieribus Est Vita!" .

0 funny, 0 helpful.

echyde says on Mar 21, 2007, 21:39:

Would love to hear more about this I find this hard to believe. Besides, how often are you going to find a place outside of Parque 93 or Zona Rosa that takes Dollars? Fuck that.

0 funny, 0 helpful.

southern151 says on Mar 21, 2007, 22:43:

When I was in Medillin... I found only one place willing to accept USD. That was a souvenier shop and they charged me according to the exchange rate. I think that this is a farse at best! Don't believe everything that you hear! Most hotels WORLDWIDE will give a discount if you are willing to ask for it. The average is 10%.

0 funny, 0 helpful.

tomtom33 says on Mar 22, 2007, 01:48:

US dollars in Colombia Don't even try to spend them. If you can find a place that will accept them, they can only give you the cambio exchange rate which is poor. And they will probably give you less than that because of the extra work in exchanging the money.

0 funny, 0 helpful.

panthdave says on Mar 22, 2007, 03:46:

US Dollars.. There is reason they don't accept Too many problems converting..I don't convert anymore just use the ATM with a couple prepaid debit cards..Now this tax law never heard of. Peru you claim your exemption at the Airport which is a pain in the ass but you can give your debit card which they credit also if I remember Argentina the same there are booths at the Airport bring your receipts and I think you can only claim so much and within two weeks I received a credit on my debit card from the Argentina government agency.

Also pay in Pesos man pain in the ass with Dollars with the control on money laundering and drug money.

Strange Tax law have not heard yet but don't stay at Hotels and probably would have to carry your passport everywhere..don't do that.
Going to research this one...I think you can email the tax authority but in Spanish..

panthdave Miami

panthdave Miami

0 funny, 0 helpful.

spigrimace says on Mar 22, 2007, 06:08:

So blatant even a "reputable" place like Makro is on board All businesses here try and evade IVA. Even Makro gives you the choice of "trilogia" or "factura". The trilogia is like what you get at Exito. Just a receipt. No names, NIT, etc. The factura has the client´s (or company) name, cedula (or NIT), etc.

So what does one do such as a restauranteur? You go & buy everything that has 16% IVA in one shot and you want it in your company´s name and you ask for the "factura" showing company name, NIT. Frying oil, detergent, utensils, frying pans, styrofoam plates, sponges, etc. Let´s say I spend 10 millones de pesos on things with 16% IVA

Then you do a run where you get your things with 10% IVA or no IVA and ask for the trilogia. Eggs, milk, processed meats, cheeses, rice, frijoles, fruits & veggies. Let´s say we spend $15 millones a month on these items.

Now sales tax (IVA) paid on purchases can be deducted from Sales tax (IVA) charged on sales.

So what does the entrpreneur do? Usually everyone has an "arriba/abajo" system and the arriba sales get reported to DIAN. Let´s say for example sake that the $25 millones in combined purchases is all his monthly costs. And let´s say our entrepreneur has a combined sales of arriba & abajo of $30 millones. Normally, he´d be making 1.8 millones a month because he´d have to hand over $4.8 millones on sales to DIAN (30 millones x 16%) less the IVA already paid of $1.6 millones (it´s actually a little less but again for example´s sake) on the $10 millones of purchases with 16% IVA which nets 3.2 millones to DIAN in IVA and leaves 1.8 millones for the entrepreneur in profit.

But what happens in reality? Basically one burns or shreds all the "trilogias" and forces his "arriba" sales equal to his purchases at 16%. So he tells DIAN he sold $10 millones, he owes $1.6 millones in IVA on Sales to DIAN, but deducts 1.6 millones on IVA paid on purchases so he sends DIAN nothing. And now he makes in reality, 5 millones a month which is $30 millones in actual sales - 25 millones in actual costs. A lot better than $1.8 millones.

Most never get caught but some do get caught and the fines are high, $60 millones, $100 millones but if you´ve gotten away with it for 20 years, you´re still way ahead.

0 funny, 0 helpful.

suizo says on Mar 22, 2007, 06:52:

Confusing... Here's an answer I got from my local travel agent:

"Buenos días Sr. XY,

El IVA de alojamiento lo deben pagar tanto extranjeros como nacionales, esto
no tiene excepción en los Hoteles.

Cualquier inquietud con gusto será atendida.

Cordial saludo,

XY
Coord. Servicios Hoteleros y Excursiones"

BUT then WHY in the name of the Lord did Interconti in Cali and Almirante Estelar in Cartagena agree to deduct the IVA of 10% if I could show a foreign passport???

0 funny, 0 helpful.

suizo says on Mar 22, 2007, 07:49:

Another answer I just received from Aviatur... "Buen dia Sr. XY:

[...]
Debe presentar su pasaporte para demostrar la extranjería y no pagar
impuesto del 10% de alojamiento.

Le presento mis disculpas por no haber rectificado en su momento.

Quedo atenta a sus comentarios,

Cordialmente,

XY
Aviatur S.A
Cartagena"


Now, I am totally confused... Beautiful country, but a real mess sometimes...

0 funny, 0 helpful.

ColombianoGringo says on Mar 22, 2007, 08:18:

panthdave You mention using prepaid debit cards. Are these cards not linked to an account? This seems like a useful option. I've not had problems using my debit card in Colombia, but it would be nice to use a prepaid card.

May I ask what bank you got these cards from and what the ATM usage fees are in Colombia?

Thanks,
CG

0 funny, 0 helpful.

tomtom33 says on Mar 22, 2007, 12:11:

I never had a debit card problem in Colombia. My debits belong to the Pulse and Cirrus networks. There are very few ATMs in Colombia that do not accept one or the other.

And my ATM usage fees are zero. Of course I have to pay the 1% processing fee, but that is it. My home bank, a credit union in the US, charges no fees.

CG, the problem is your card.

0 funny, 0 helpful.