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Confusion over 19% Chilean accomodation tax

Confusion over 19% Chilean accomodation tax

Old Jan 23, 16, 6:21 am
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Question Confusion over 19% Chilean accomodation tax

Hi!

I'm off to Chile later in the week. I'm still sorting out my accomodation for early Feb down in the Torre del Paine Park. I'm on the Fantastico Sur website at the moment, and am a bit confused with the pricing.

For, say, a night in the Refugio Torre Norte, it's charging USD 55 or CLP 30,000. Then there is the standard note:
"Foreign Franchise: In Chile we have this Tax Exemption Foreign Franchise, which operates if showing your original passport, original tourist card given when arriving to Chile, staying at the Refugios and paying in foreign currency. So you will be exempted of paying taxes (IVA, 19%) in lodging."

It doesn't take a genius to work out that USD 55 ~ CLP 39,350, so nearly a third more than the Chilean price. Even after you add 19% to the CLP price, this only bring the CLP price to 35,700, so around USD 6 (10%) cheaper than the USD price.

Is it *supposed* to work like that? Why would I pay the "tax free" USD price, when I can pay the "taxed" CLP price which is less? Can foreigners elect to pay the CLP price, or must foreigners pay the USD one? Or are Fantatico Sur just gouging tourists with atrocious rates, and hoping no one will realise?

Their rate would seen to be 1 USD = 545 CLP, where xe.com say 1 USD = 715 CLP.

Does Chile have a black market rate like Argentina? I've not read about it before.

Thanks and any info!
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Old Jan 23, 16, 9:00 am
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We stayed in a hotel in Santiago in November and we paid cash in dollars so they didn't charge us the 19% tax (which also applies to card payments), but the whole idea is that the price in dollars should be cheaper than the price in Chilean pesos. What they might mean is that the price is 30,000 CLP which you pay in dollars at the day's exchange rate, and otherwise they charge you 55 USD, but that is still way more than 30,000 + tax. I would e-mail the refugio people to ask for clarification.

On a sidenote, Argentina has no black market rate anymore
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Old Jan 23, 16, 12:35 pm
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Originally Posted by Marambio View Post
the whole idea is that the price in dollars should be cheaper than the price in Chilean pesos
That's what I assumed when I first read about it. But then I thought it might just be a clever way to have dual (higher) pricing for tourists (which is what normally happens when locals pay a different price)

I've emailed the company now and they say I can pay in CLP, so I guess thats ok. Even with the extra 19% it's cheaper than the USD price.
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Old Jan 25, 16, 6:26 am
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The Chilean peso trades freely against the US dollar; there is no black market rate like there was until recently in Argentina.

The peso has dropped in value dramatically against the US dollar over the last couple of years, due mainly to the commodities crisis (the price of copper, Chile's main export, has plummeted). I suspect the website you cite has simply not been updated recently.

Foreign tourists are exempt from paying the 19% VAT (it's called IVA in Chile) on hotel bills. When you check in, they will ask for your passport and will make a photocopy of the passport and the tourist card that you will receive from immigration authorities at the Santiago airport on arrival. When you check out, they will bill you via a "factura de exportación" which does not include the 19% IVA.

It has been a while since I paid a bill with a factura de exportación, as I was until recently a resident of Chile and therefore had to pay the IVA. But if I recall correctly, the bill will be in US dollars. You should clarify this when you check in, and if you will be billed in US dollars you should clarify the exchange rate that the hotel will apply. Current exchange rate is approximately US$1.00 = CLP$715. At that rate Chile is a great travel bargain!
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Old Jan 26, 16, 11:20 am
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Clarifications of the exemption:

Not all lodging establishments can offer it as they must register with the tax authority to be able to offer it (and thus required to make a copy of the passport and tourist card of a tourist taking advantage of the exemption).

If registered to offer it, I understand it is not mandatory that the lodging establishment offer it to tourists.

There is an official time limit for tourists in Chile to be able to take advantage of it. A tourist that has been in Chile over 59 days is not eligible for the exemption though I'm sure many have slipped through the cracks (the problem will be for the lodging establishment if audited).
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Old Feb 7, 16, 9:14 am
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Originally Posted by Marambio View Post
We stayed in a hotel in Santiago in November and we paid cash in dollars so they didn't charge us the 19% tax (which also applies to card payments),....
We are going to Santiago in early March, first time... 4 nights, need suggestions for hotels and things to do? And dollars is what I should have or pesos are OK? Some hotels say the safe is at the front desk, how does that work?

Originally Posted by shefgab View Post
I've emailed the company now and they say I can pay in CLP, so I guess thats ok. Even with the extra 19% it's cheaper than the USD price.
How was your trip? and did the pricing worked out with no taxes in pesos or dollars?
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