Now that we’re back in Uruguay for the last few days of our South America trip, I thought I’d share an interesting value-added tax scheme being used to promote tourism in Uruguay.
Apparently, if you dine at a restaurant in Uruguay and pay with a non-Uruguayan credit or debit card, the value-added tax or VAT— which is rather substantial at 22% — is automatically refunded to your card.
Generally, I prefer to pay in cash at restaurants, since servers can’t always be trusted not to mishandle a card. Given the incentive, I’ve been making an exception for Uruguay.
I’ve tested it with both credit and debit cards, having found one restaurant that took debit cards but not credit cards. Debit or credit, either way, we’ve been seeing a credit for the VAT on our accounts about one business day later.
The type of restaurant doesn’t seem to matter either. We ate at a McDonald’s while waiting for a bus in Montevideo, and we got the rebate there as well.
The tax break has been welcome for us, as we’ve had a bit of sticker shock when we’ve looked at menus in Montevideo, especially at dinner time. When we back out the VAT, the prices have been more reasonable, although still a bit high.
Apparently the VAT rebate includes rental cars and hotels as well. We got the rebate on our car rental. We’ve only stayed at one proper hotel in Uruguay, and we prepaid it through Expedia, so I can’t confirm.