Chile VAT digital services B2C non-residents new requirements

SII publishes new B2C compliance requirements for foreign digital service providers

The Chilean tax office, Servicio de Impuestos Internos (SII) has published new details on VAT registration and compliance requirement for non-resident providers of electronic or digital requirements to local consumers.  SII is providing a new platform for simplified VAT registration and reporting.  Filings are down either monthly or quarterly.

The new procedures come into effect from 1 December 2024.

Chile introduced B2C VAT obligations on non-resident providers of digital services in July 2020. B2B transactions are excluded, and should apply the reverse charge mechanism.

2026 platform operator liabilities; new place of supply rules

A new Bill is proposing updating requirements from January 2027:

• Digital platform VAT obligations following the deemed supplier rules; and
• Update on determinate of the place of supply rules (determining if Chilean VAT is due). This may be determined based on using at least two of the following:
  • Payment address;
  • IP address;
  • SIM card;
  • Postal address

July 2023 VAT confirmed on subscriptions for digital journals by foreign providers

The “Tesorería General de la República” has confirmed that Value Added Tax is due to be charged and collected by non-resident providers of the following subscription-based electronic services:

• Educational journals
• Consumer and news journals

VAT on foreign digital services since July 2020

Chile introduced its 19% Value Added Tax on non-resident providers of digital services to consumers from 1 July 2020. This will require a VAT registration with the tax office, SII Commissioner, via a simplified process. There is no VAT registration threshold. Alternatively, payments made will be subject a withholding VAT. Marketplaces are also effectively drawn into the tax net as the facilitating or deemed supplier.

Check our global VAT and GST on digital services tracker to see which other countries have introduced indirect taxes on electronic services to consumers.

B2B transactions by non-resident providers to Chilean business customers are subject to the reverse charge; the Chilean VAT-registered customer must report and account for the VAT and no payment is made.

The Chilean tax authorities now regularly monitor payments through to foreign providers via payment providers.  They have adopted this method to identify non-compliance and raise back tax assessments.

What digital services are liable to Chilian VAT?

The following electronic or digital services are subject to VAT in Chile:

• Telecoms and texting;
• Online gaming;
• E-books and online journals;
• Digital advertising;
• Apps;
• Online storage;
• Downloads or streaming video, music etc;
• Cloud (SaaS) and downloads of software;
• Infrastructure as a services (IaaS);
• Platform as a Service (PaaS); and
• Intermediary services.

Determine the residency of the consumer

Providers and marketplaces need to determine the residency of their customer, or where the services were consumed, to decide if Chilian VAT is due. This may be done by relying on the following evidence:

• Billing address
• Telephone or SIM country code
• Address of payment credit card or bank transfer
• IP address of laptop, mobile phone or similar device

Registration and compliance – no VAT registration threshold

Foreign providers of digital services or facilitating marketplaces must apply for a VAT registration immediately. There is no VAT registration threshold. Non-residents do not need a local Fiscal Representative – they may VAT register directly.  Providers may use the digital services portal – ‘Simplified Tax Regime’. Note: providers may not reclaim any Chilian VAT incurred if they opt for this regime. VAT registered providers do not have to supply VAT invoices.

VAT returns may be filed monthly or quarterly. In either case, the return and payment of any VAT must be made by the 20^th of the month following the reporting period. VAT liabilities may be paid in either peso, USD or Euro’s. If there are no taxable supplies in the period, a nil return is not required.

If you need to complete Chilean digital returns, VAT Calc’s VAT Filer can accurately populate any country submission with verified VAT or GST data from our VAT Calculator or VAT Auditor services.

Central and South America VAT on digital services