Complete LATAM VAT guide 2026: rates, exemptions, invoicing
Published:
VAT confuses new founders the most. Each country has its rate, exemptions and invoice format. This consolidates the main Hispanic markets for 2026.
Open VAT calculator →VAT rates per country (2026)
| Country | Standard | Reduced | Local name |
|---|---|---|---|
| Ecuador | 15% | 0% essentials | IVA |
| Mexico | 16% | 8% border, 0% medicine/food | IVA |
| Colombia | 19% | 5% / 0% | IVA |
| Peru | 18% | — | IGV |
| Argentina | 21% | 10.5% / 27% | IVA |
| Chile | 19% | — | IVA |
| Spain | 21% | 10% / 4% | IVA |
| Brazil | 17–25% | state-varying | ICMS + IPI + PIS + COFINS |
Who collects VAT
Any seller of taxable goods/services unless on a simplified small-taxpayer regime exempt from charging end customers.
Common exemptions
- Unprocessed basic food (rice, milk, bread).
- Human-use medicines.
- State-regulated formal education.
- Healthcare services in most countries.
- Exports: 0% in almost all LATAM.
How to invoice with VAT
- State tax base (pre-VAT price).
- Apply rate.
- Show VAT line and gross total.
- Include both tax IDs.
- Authorized sequential numbering.
- E-invoicing: digital signature + send to tax authority before printing.
Monthly filing
- Output VAT (sales).
- Input VAT (purchases).
- Net to pay = output − input.
Common traps
- Skipping small invoices.
- Mixing VAT with VAT-withholding.
- Not reconciling monthly.
- Selling abroad without export invoicing (pay 15% you could have charged 0%).