Tag Archives | foreign travel

Dolar Blue Hits Record Highs After New AFIP Rules

Dolar Blue Hits Record HighsThe “dolar blue” has hit record highs for the past two days following new rules from AFIP (the Argentine tax agency) that imposed additional fees on the use of Argentine credit cards as well as on travel packages purchased in Argentina for travel outside the country.

First, AFIP raised the surcharge that Argentines must pay for using their credit cards abroad from 15% to 20%. This fee is applied to all purchase made in foreign currency, including Internet purchase. Then, they imposed a 20% tax on all travel purchases made in Argentina for travel abroad. This was designed to reduce the benefit of paying for your travel in pesos at the official rate while getting the blue market rate for your dollars (see example below). Argentine residents can get this 20% back when they file their tax returns.

Initially it was reported that non-residents would no longer be able to buy travel packages or airfare for travel abroad in Argentina, but it seems that this has been changed to allow them to buy the packages with the same 20% surcharge. Supposedly this is a tax that you can get back when you file your foreign tax returns as well, though it is unlikely that most people will do this.

The result of all the new AFIP regulations is that the dolar blue went crazy, jumping from ARS $8.06 on Monday, to ARS $8.25 on Tuesday and then to ARS $8.70 on Wednesday! This is an almost 8% jump in just 2 days – meaning the tax is really only 12%. 🙂

So, how does this all work? I think an example is best…

Let’s say you wanted to buy an airline ticket from Buenos Aires (EZE) to New York City (JFK). You go online and find that American Airlines is selling the ticket for U$S 1200. Now, you could buy that ticket on your non-Argentine credit card and you would pay U$S 1200. Simple.

The benefit comes into play when you buy that ticket with your Argentine credit card or pay in pesos at the American Airlines office in Buenos Aires. They would convert that U$S 1200 ticket to pesos at the official rate – ARS $5.10 * U$S 1200 = ARS $6120. Now, assuming you were getting the pesos you needed to pay 3this at the blue market rate (ARS $8.00) rather than the official rate, you’d be getting that same ticket for only U$S 765 (ARS $6120 / ARS $8.00). Supposedly this was being over-exploited by Uruguayans and Chileans who were coming to Argentina specifically to purchase travel. This is why AFIP imposed the new 20$ fee – to make this less attractive.

Yet, even with the new fee, buying that same ticket would be cheaper in Argentina than paying in dollars. Assume that U$S 1200 ticket has $100 in taxes (which you do not pay the 20% charge on), you’d now have to pay U$S 1420 for the ticket. That would be ARS $7242 at the official rate and U$S 875 at today’s blue market rate of ARS $8.27. That’s still a significant savings off the original U$S 1200 price.

So, what did this regulation actually do? Just made it more expensive for Argentines to travel. If you earn and spend in pesos, the dolar blue has relatively little meaning to you and all of this juts makes like more difficult…

Note: The Xoom rate is currently only at $7.53 as it usually takes them a few days to catch up to major blue market changes.

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Voltage Craziness

I spent today researcing plug adapters, voltage converters and transformers that I would need for my move to BsAs (yes, this seems to be the common abbreviation for Buenos Aires). The International Electrical Supplies (IES) web site has a lot of useful information including a basic electricity introduction, a guide to choosing the right product, and, of course, a store to buy them all.

To quickly sum it up, since US electronics run at 110v and 60hz, there are three possibilities needed to use them in Buenos Aires where the voltage is 220v and 50hz:

Argentina Plug AdaptersPlug Adapter
Plug adapters simply convert the standard US electrical plug to fit the plugs used in Argentina. They do not convert the voltage! These will only work for electronics that are multi-voltage. This is important to remember as plugging in something that is not multi-voltage will short it out. Most laptops, digital cameras, computers, etc. are multi-voltage. To check if your device is multi-voltage, look at the power adapter and see what it lists as the input. For example, my Dell laptop is listed as: INPUT: 100-240V / 50-60Hz, so all that needs is an adapter to work. My Dell desktop PC has a red switch on the back of the power supply that converts it work at 220v, so all I need to do is add the adapter and flip the switch before I plug it in.  The same applies to my Sony digital camera charger, Blackberry charger, and wireless router. My computer speakers, DVD player and Nintendo Wii only operate at 110v / 60Hz so those will need a converter or transformer.

Voltage ConverterVoltage Converter
A voltage converter steps down the higher 220v to the US standard of 110v. These converters are lightweight and cheap, unfortunately, they are for non-electronic and ungrounded appliances only. In addition, they are not designed for continuous use and should be used at most 45 minutes to an hour at a time and unplugged when not in use. I haven’t found one thing that I am bringing that I can use this for, so I’ll need to bring a voltage transformer as well.

Voltage TransformerVoltage Transformer
Unlike converters, transformers can be used with grounded or ungrounded plugs as well as electronic or non-electronic devices. The transformer we’re interested in is the one that steps down the voltage from 220v to 110/120v. Transformers can also run full time unlike simpler converters. In order to determine what transformer you need, you first need to figure out what the wattage of the equipment you need to power is. Wattage is a simple calculation: Volt x Amp = Watt. If this is not given for a device, you can calculate it by multiplying those numbers off of the power supply on the device. You should also consider whether evertyhing needs to be connected simultaneously and whether you need multiple transformers for different areas. IES has a good guide to choosing a transformer. You’ll also need to buy adapters for these if you plan to use them in BsAs.

So, looks like I’ll be picking up a bunch of adapters and a 100 watt and 1000 watt transformer for my needs.

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