The presented contribution focuses on describing the Value Added Tax refund to foreign tourists, specifically the Tax-Free Shopping incentive, that increases tourists’ propensity to buy retail goods where shopping can even sometimes be the primary reason for traveling. To have a practical analysis and comparison, four economies from South America were chosen. Colombia and Ecuador whose tax-refund system is entirely operated by the State and Argentina and Uruguay whose govern-ments have decided to outsource their VAT refund service to tourists having private companies operate them. Adding to this, an evaluation of the main characteristics of these countries regarding the com-petitiveness of their tourism sector was gathered with data obtained from the Travel & Tourism Com-petitiveness Index (TTCI) Report (2019). The findings of this research provide a benchmark to tourism policymakers interested in assessing changes overtime on this type of incentive.