Internal Revenue Service confirms VAT on cryptocurrencies
The Internal Revenue Service of Chile (SII) has confirmed the VAT liabilities on the trading of digital currencies such as bitcoin. Like many jurisdictions, trading of cryptocurrencies are treated as exempt from VAT. These digital currencies are considered an intangible.
However, commissions for services for the purchase and sale of cryptocurrencies on behalf of third parties, sending, receiving and depositing cryptocurrencies, considering that these services are part of the intermediation of digital assets, they are taxed with VAT.
According to the new rules of service incorporated in the LIVS by Law 21,420, a ticket or invoice must be issued in this regard, subject to VAT, depending on whether the purchaser is a consumer or a taxpayer.
his falls into line with the preliminary EU VAT on cryptoassets review being undertaken by the VAT Committee.
VAT on cryptocurrencies
| Stage | Examples | VAT Treatment |
| Crypto-assets | Payment, security or utility tokens | Treated as currency |
| Creation of tokens | Mining or forging | Out of scope of VAT |
| Supplies free of charge | Airdrop | Out of scope of VAT |
| Supplies for consideration | Taxable; but exempt | |
| Storage and transfer | Hot or cold digital wallets | Taxable; but exempt |
| Exchange for crypto-assets or cryptocurrencies | Taxable; but exempt | |
| Cryptocurrencies as consideration for supply | Taxable; VAT due | |
| Token modification | Modifications, forks or splitting of tokens | Out of scope of VAT |
