Yesterday, the Legislative Assembly approved in first debate two bills of law intending to extend the VAT exoneration applicable to tourism and construction services.

Regarding tourism services, the bill proposes that during the first two years of the entry into force of the Strengthening of the Public Finances Law (until June 30th, 2021), tourism services should remain exempt.

In addition,  it is intended to add a final paragraph to article 26 of VAT Law, to allow the taxpayer, in case of international air transport services, to obtain a full tax credit in the purchase of goods and services related to the portion of the service with reduced rate.

In terms of construction services, an amendment to the Strengthening of the Public Finances Law is proposed to exempt from VAT engineering, architecture, topography, and civil construction services, registered before the CFIA until June 30th, 2021. In the same way as tourism services, this bill proposes a reduced VAT rate for the next two years -2021 and 2022- (4% and 8%, respectively).  Projects registered during these mentioned periods, will be able to apply the corresponding reduced rate as well.