There are a shrinking number of benefits these days to having an American passport and, although European passports are much better, they too can provide some unpleasant side effects in certain hostile countries. Sometimes, these passports require extra taxes Americans, Canadians, Albanians, Mexicans and Australians all get the privilege of paying the “reciprocity fee” at the Santiago airport (up to US$160), which is good for the life of the passport. So that fact is not a stellar benefit by any means.

Applying for residency in Chile is also much more expensive for Frenchmen and Englishmen (and many others) than it is for Americans (which is very cheap). These added fees are tantamount to another tax.

However, one thing that foreign travel documents can do for you in Chile is get you a 19% discount on the room rate in hotels. But be careful. Merely showing the passport at check-in alone is not enough, and the check in clerk will likely not tell you all that is required, because the hotel can deduct expenses against the value added tax (IVA); a portion of the tax becomes a form of revenue for the company. So they do not have much incentive to inform customers of the national policy.

In order to deduct the IVA you must do the following:

  1. Show the foreign passport, and many places will likely want to see your entry stamp in the passport or on the little paper you get at the airport to make sure that you are not really a resident of Chile masquerading as a tourist.
  2. Tell them that you want to have your rate exempt from IVA and
  3. Tell them you want to pay your bill in dollars, not pesos, even if by credit card.

If you do not do all of these things you will likely not get the discount. Also note that in smaller establishments the owners are often ignorant of the legislation that exempts foreigners from paying IVA at hotels. In those places you will probably be stuck paying the tax.