Value-added Tax

A 19% VAT is imposed on transactions where personal property is transferred for consideration, as well as on regular transactions of personal and real property.

This is assumed for sales within a company's business. VAT is also applied to services, including recurring and non-recurring services, that generate charges for interest, premiums, commissions, or similar forms of compensation and are deemed to be of a commercial, industrial, financial, mining, construction, advertising, computational, or other nature. Imports are subject to VAT, regardless of frequency. Professional services provided by employees or freelancers are exempt from VAT.

The VAT paid on imports, purchases, and received services (tax credit) can be used to offset the VAT owed on sales and provided services (tax debit).

The taxpayer who sells or provides services must submit a monthly tax return (F29) and pay the net tax debit within the first 20 days of the following month.

If there is a net tax credit, it can be applied in future months after being adjusted for inflation.

Exports are not taxed with VAT. The VAT paid on purchases of goods and services used in producing the exported goods can be deducted from the VAT owed on other sales or reimbursed by the SII.

For the VAT paid on exported services to be reimbursed, the National Customs Service must classify the services as exports, and the exemption applies to services provided entirely or partially in Chile for use abroad.

Capital goods imports are exempt from VAT if certain criteria are met. Since June 1, 2020, digital services provided by taxpayers residing abroad are subject to a 19% VAT. Digital services include digital intermediation, digital entertainment content such as movies and music through downloading or streaming, external advertising, and data storage, among others. The provision of software, storage, platforms, or IT infrastructure is also subject to VAT.

According to the latest regulations from the Chilean government, starting January 1, 2023, based on law 21.420, Value Added Tax (VAT) will be also applied to professional services.

Before the amendment of law 21.420, the VAT law classified service provisions into different groups, leaving some of them subject to VAT and the majority exempt from this tax; the amendment to the law eliminates this classification and establishes that all services will be subject to VAT starting in January 2023.

Services subject to Additional Tax are usually exempt from VAT. However, in the case of services taxed under Article 59 of the Income Tax Law but exempt from Additional Tax due to tax treaties or national laws, they may still be subject to VAT if provided or used in Chile and correspond to services generally taxed with VAT.

Luxury goods and certain beverages are subject to VAT and also to additional taxes on tobacco and fuel consumption, with rates that vary based on various factors.