The value added tax refund dilemma for expats

By Garry Vatcher There are a few topics that spark lively debate among Expats living in Ecuador-religion, politics… and yes, even peanut butter. Hogar de Esperanza is hosting an information session July 22 on the topic of IVA refunds for expats and tourists. But right up there with them is the question of IVA/VAT refunds for seniors. What is Value Added Tax? The Impuesto al Valor Agregado (IVA) or Value Added Tax (VAT) works differently from a traditional sales tax. A sales tax is applied once at the final point of sale. IVA/VAT, on the other hand, is applied at every stage of the supply chain whenever value is added to a product or service. Businesses pay IVA/VAT on purchases but can reclaim it later. In some countries, certain groups, such as seniors, individuals with disabilities, or tourists are also eligible for refunds. Here in Ecuador, residents over 65 and people with disabilities can request a refund of IVA/VAT paid on specific purchases. A Different Way of Looking at Rebates For many of us coming from countries with IVA/VAT systems, we often think of it more like income tax credits or exemptions-not simply a sales tax. And that leads to the debate… “The Government Needs the Money” Does it? We all see the headlines-corruption, mismanagement, and inefficiencies. Many people feel the government already has enough resources and question how effectively those resources are used. You are in Control and You have a choice IVA/VAT refunds were designed to support those in need. But here’s the key point: you can leave that money with the government, or you can claim it and decide where it goes. An Alternative For the past six years, Fundación Hogar de Esperanza has offered Expats a simple and meaningful alternative. Through our Expat Services Center, we can process IVA refunds for those who wish to receive them. We charge a small fee: $10/hour for set-up and 10% of the monthly return. But many people choose a different path. Instead of keeping the refund, they direct it back into the community-helping provide food, medications, and essential support to those in need. We do not charge a set-up fee for those donating their refunds. Once set up, you don’t have to do anything. Every month, your IVA refund is automatically redirected to Hogar, and you will be making a real difference. Learn More Foundation Hogar de Esperanza is launching a new activity every Wednesday from 2 to 4 p.m., at our Hostal Pichincha location located at Juan Montalvo 9-78 between Gran Colombia and Simon Bolivar. An Afternoon at the Hogar is unique opportunity to meet new people, socialize and get information you need about living in Ecuador. We will have a book exchange and games available. And it is FREE. No pressure to buy food or drinks. Bring your friends and socialize for a few hours. Each Wednesday we will start off with a 20 to 30-minute information session. On July 22, the topic will be IVA refunds. We will cover: What can be claimed as a refund. How much you can receive. How the process works. You will also have an opportunity to meet our Expat Services Center team and discover how we can help make your life in Ecuador easier. To help us plan, we recommend pre-registration, although not required. You are welcome to drop in without registration. Contact Patricia at [email protected] Garry Vatcher is president and founder of Foundation Hogar de Esperanza. He has been coming to Ecuador since 1987 and permanently moved to Cuenca 12 years ago. The foundation provides emergency assistance to thousands of people each year. With his guidance, the foundation has forged alliances with some of Ecuador’s major institutions including hospitals, the National Police, Amazon communities, universities, and governments. The foundation has received numerous awards and recognition for its work from local and international bodies. For information about all Foundation Hogar de Esperanza projects, go to https://hogaresperanza.org The post The value added tax refund dilemma for expats appeared first on CuencaHighLife.