One of the downsides of living in Medellín or Colombia is that Colombia has a 19 percent IVA tax (a.k.a. value-added tax or VAT) on many products. This tax makes buying many things in Colombia more expensive.
The IVA tax in Colombia used to be 16 percent but was increased to 19 percent in February 2017. However, if you are a foreign tourist visiting and not residing in Colombia you can get a 100 percent IVA tax refund for many products purchased in Colombia.
But if you were born in Colombia but a citizen of another country and traveling to Colombia, the IVA tax refund doesn’t apply.
Many countries in Latin America tend to have a VAT. Colombia’s 19 percent VAT tax is the same rate as in Chile. In Mexico it’s 16 percent, in Peru it’s 18 percent, in Brazil it’s 17 percent but can go as high as 25 percent, in Argentina it’s 21 percent, in Uruguay it’s 22 percent, and in Ecuador it’s 12 percent for standard goods and 15 percent for luxury goods.
In this article, we’ll look at the IVA tax in Colombia in more detail. And we’ll also show how tourists can get an refund of this IVA tax.
Colombia’s IVA Tax
Colombia VAT, which is known as the IVA tax, is the country’s main indirect tax, which is collected by DIAN. And it is levied at 19 percent on most goods and services sold in Colombia. However, there are some things that are exempt from the IVA tax. And some things are taxed at lower rates.
Among items that are taxed at the full 19 percent IVA tax are clothing, personal and household toiletries, cell phones that cost more than 650,000 pesos, movies, airline tickets, appliances, footwear, jewelry, oils, margarine, condiments (spices, sauces and dressings), spare parts for cars and vehicles (except electric ones, which pay only 5%).
Cell phone data plans include the tax starting at 45,000 pesos and some electronics will only be taxed beyond a certain price. For example, for tablets the tax starts after a cost of 650,000 pesos. And for computers the tax starts after a cost of 1,500,000 pesos. So, if you buy a low-cost tablet or computer in Colombia there is no IVA tax.
The IVA tax is 14 percent on domestic and imported beers. And there is a 5 percent IVA tax on several products such as coffee, sanitary towels, tampons, diapers, toilet paper, bicycles of less than 1,500,000 pesos, among others.
And for some services the IVA tax is the lower 5 percent including prepaid medicine plans, surgery and hospitalization insurance policies and health insurance policies
In addition, some grocery items such as milk, eggs and fruits and vegetables and several other items are exempt from the IVA tax in Colombia.
The IVA tax is included in prices you see posted on items in stores. But your receipt will break out the IVA tax into the different categories – 19 percent, 5 percent or exempt (zero percent).
Colombia’s IVA Tax Refund
Foreign tourists not residing in Colombia have the right to a 100% refund of the IVA tax paid on goods purchased in Colombia. The following goods are eligible for the IVA tax refund:
- Compact discs
- Linens and underwear
- Leather Products
- General jewelry (not including watches)
- Hardware items
You cannot get an IVA tax refund on food (restaurant or groceries), alcohol, lodging, medical or entertainment costs.
Colombian nationals who hold dual nationality are not considered to be foreign tourists or non-resident foreign visitors in Colombia, and therefore, they do not have the right to the IVA tax refund.
How to Request an IVA Tax Refund
The IVA tax refund can be requested at the Dirección de Impuestos y Aduanas Nacionales (DIAN) office in any international airport in the country.
In Medellín, the DIAN office is located in the José María Córdova airport to the left of the Avianca check-in. According to staff in this office, DIAN at the airport is staffed 24 hours a day every day. But late at night this office may be closed when they rarely have clients. But you can ask the airport information to call DIAN and they will send someone from their office downstairs, which is staffed 24 hours.
At other international airports in Colombia, just ask where the DIAN office is located.
To be eligible for an IVA refund, the total value of purchases (including IVA tax) must be equal to or greater than 10 Unidades de Valor Tributario (UVT). The UVT for 2018 in Colombia is 33,156. So 10 times that is 331,560 pesos for 2018, which is the minimum total purchases to be eligible for an IVA refund.
The maximum tax refund amount is limited to 100 times UVT or 3,315,600 pesos for 2018. In addition, the IVA refund is limited to a maximum of 10 of the same item.
Requirements for IVA Tax Refund Application
The following are the requirements for an IVA Tax Refund according to DIAN:
- Complete Form 1344.
- Present Form 1344 to DIAN when exiting the country and before checking in with your airline.
- Show your original passport and submit a copy of the passport’s data page and the page with your most recent tourist stamp in your passport.
- Submit photocopies of sales receipt(s). The receipts must be no more than six months old.
- The purchase of taxed goods in Colombia must be done in person by a card payment terminal with an international credit and/or debit card issued outside of the country. And make sure to keep a copy of the credit card voucher and the additional receipt you get that has the IVA information on it for each purchase.
- The purchase of taxed goods must be done from merchants registered in the common sales tax system in Colombia and be supported by sales receipts that contain the breakdown of the IVA tax.
- Goods acquired with the right to IVA refund must effectively exit the country.
- No more than one refund application may be submitted per quarter.
However, note that readers reported in November 2018 that the form has changed and if you download the form from the DIAN website before showing up at the DIAN office at an airport it can’t be used. So, budget some time at the DIAN office to fill out the form and make sure have copies of everything ready before you get to the airport.
Three months from the date the form is registered at a DIAN office located in an international airport or port, a credit will be issued to the international credit card indicated on the Form 1344 application form. The financial costs and notification expenses incurred will be deducted from the value refunded.
If you haven’t received your refund after three months, you can contact DIAN via email at firstname.lastname@example.org.
The Bottom Line: Colombia’s IVA Tax
Colombia has a relatively high IVA tax (VAT) at 19 percent, which is a downside for living in the country. But several other countries in Latin America also have a relatively high VAT. So, Colombia isn’t unique in the region.
Fortunately for tourists, Colombia offers an IVA tax refund. The refund is straightforward to apply for. And the application form is in English with a link to the form found above. Most notably, I have talked to some tourists recently who received their tax refunds in about the three months, as promised by DIAN.
In addition, “How to get a Colombia IVA tax refund?” is a common question asked by expats visiting Colombia. So, we included this question in our list of Medellín frequently asked questions (FAQ).
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Editors note: updated on July 8, 2018 to change the UVT value from 2017 to 2018 numbers.
Editors note: updated on October 11, 2018 to add information that if you were born in Colombia but a citizen of another country and traveling to Colombia, the IVA tax refund doesn’t apply.
Editors note: updated on November 4, 2018, to add information that watches are not included in the IVA tax refund based on a reader comment.
Editors note: updated on November 25, 2018, to indicate that you must fill out the form for the IVA tax refund at the DIAN office at an airport. The form downloaded from the DIAN office won’t be accepted.