Foreign tourists who enter Peru will no longer pay IGV

In order to boost tourism, one of the sectors hardest hit by the COVID-19, social conflicts and the climatic emergency, the Government has ordered that foreigners do not pay VAT during their stay in our country. The measure would come into effect from June or “a little before,” according to Luis Helguero, head of the Ministry of Foreign Trade and Tourism (Mincetur).

every purchase counts

The tax free – tax free, translated from English – implies the return of the IGV to those tourists who make purchases in establishments that receive authorization from the Government so that, once the transaction is completed, they receive an electronic invoice and its proof. And, before leaving Peru, tourists must go to a booth installed at the Jorge Chávez International Airport —the only door, as proof of the centralist policy— to request the return of the IGV. Sunat will verify the exit of the acquired goods.

Is it a hit? For the tax lawyer David Bravo, the IGV exemption in receptive tourism is technically correct and fair, since there is no logic in taxing a foreigner with this tax, which applies to local consumption, when “a foreigner will not consume it here ”. This money would be credited to the account declared by the traveler. Once its rulemaking is complete, there will be more details. “Although IGV will not be collected, there will be greater demand and the companies that sell these products do pay income tax. That, in turn, generates a virtuous circle”, explained the lawyer for La República.

There will be more interest in formalizing

Carlos Loayza, general manager of the National Chamber of Tourism (Canatur), pointed out that the spending capacity of travelers will be improved, and Peru will be taken out of the queue to finally place us among the destinations with the most facilities on offer, as it happens in the main countries that live from tourism. “This year 2.5 million foreign tourists will arrive. The goal remains. The return to social peace and improvement of conditions will continue to motivate them to visit our country, even for more days,” Loayza stressed.

In his opinion, the formalization of companies and ventures will be encouraged, since in order to validate the tax free, these businesses have to pay taxes, a duty of others for those in the informal sector. Minister Helguero, for his part, emphasized that the establishments that may apply the tax free must belong to the categories of very good taxpayer, good taxpayer and normal taxpayer in the Sunat register.

figures

5 Latin American countries apply tax free: Colombia, Uruguay, Argentina, Chile and Mexico. 17% more than what was collected in 2022 is expected for this year: in total, US$3,337 million. 4.4 million foreign tourists entered Peru in 2019.

reactions

Luis Helguero, Minister of Foreign Trade and Tourism

“This legal provision is important, because by reducing the cost of 18% to those who have a limited budget to come to the PeruThey will be encouraged to do so and that will generate a greater flow of tourists.”

David Bravo, tax attorney

“Although it will not be collected IGV, the companies that sell these products do pay income tax. That, in turn, creates a virtuous circle. It is a fair and technically correct measure”.