MercoPress. South Atlantic News Agency

Punta Arenas cruise and port services VAT controversy

Cruises at Punta Arenas jetty

Chile's Free Competition tribunal ruled that legislation allowing the reimbursement of VAT (value added tax) only to foreign cruise companies was discriminatory for the domestic cruise industry.

The demand was presented by several cruise and maritime service companies from Punta Arenas which alleged that a law dating back to 1974 and specifically geared to benefit foreign cruises was arbitrary and causing disadvantageous competition. The Competition tribunal added to its favorable ruling that even Chile's Internal Revenue Service understands that the bill as drafted clearly discriminates in favor of foreign maritime transport and tourism corporations and punished the local industry. The bill refers to the reimbursement to foreign companies of VAT paid on port services when these vessels call in at the remote provinces of Chile, Regions I, XI and XII Magallanes of which Punta Arenas is the capital. Similarly regarding cruise passenger landings and the contracting of local small vessels for tours in the region to places where there are no port facilities, jetties or surveillance by local authorities, the Competition tribunal ruled that the more service providers involved promotes competition, improves services, lowers fares and should provide better quality services. As for the above case competition conditions must be fair and equal both for international and domestic maritime services providers. The two recommendations will be presented to Chile's Finance minister for review.