Mexico Offers VAT Rebate to Tourists

Hoping to attract more recession-wary Americans, Mexico in June will begin reimbursing the value-added tax (VAT) charged on purchases made at stores and businesses throughout the country to tourists who arrive by air and cruise ship.

Mexico’s Ministry of Tourism said tourists will be able to use kiosks at five major airports (Mexico City, Cancun, Guadalajara, Los Cabos and Puerto Vallarta) to reclaim the 15 percent VAT they’ve paid on goods totaling at least $115.

In order to qualify for the refund, the purchases must be made at approved stores and businesses with cash or credit cards/debit cards issued outside of Mexico. Tourists must present their passports when making their purchases and obtain a receipt and an official refund form from the approved merchant. The tax credit will apply to shopping, not to purchases on meals and lodging.

Visitors will be able to get half of the VAT in Mexican pesos, up to a maximum of $955 (10,000 Mexican pesos). The rest will be credited electronically to visitors’ credit cards or bank accounts within 40 days.

Starting in 2009, the program will be phased in at other major airports and cruise ports. The more than 21 million tourists who visited Mexico in 2007 spent $13 billion, making tourism the third-largest source of revenue.