Since the introduction of a tax aimed at platforms providing or selling services within Chile—regardless of whether they have a physical presence in the country—426 companies have registered to fulfill this obligation. However, there are still 92 entities that have yet to comply. This change came into effect as part of a tax reform initiated in February 2020 under the administration of Sebastián Piñera.
The reform introduced a Value Added Tax (VAT) on digital services rendered by foreign platform providers without a domicile in Chile, as outlined in Law No. 21,210. By June of the same year, notable companies such as Google, Netflix, Airbnb, Spotify, and Amazon began adhering to these tax regulations.
For any foreign business or platform wishing to operate in Chile, compliance with local tax laws is mandatory. To facilitate this process, the Internal Revenue Service (SII) has set up a dedicated platform where businesses can register, obtain a Tax ID Number, and select their payment preferences, including currency and frequency of payments which can be made monthly or quarterly.
How Much Revenue Has Been Generated? As of the end of 2023, the SII reports that 426 platforms have registered for VAT payments on digital services in Chile, collectively raising over US$1.001 billion to date. Notably, the majority of these companies have opted for the quarterly payment schedule. Hernán Figolett, director of the SII, highlighted the significance of the collected revenue, stating, “The more than one billion dollars accumulated from VAT on digital services demonstrates that we are progressing toward our goal of enhancing tax compliance. It reflects our commitment to ensuring all taxpayers meet their obligations.” He further noted that the increasing revenue is “positive news,” as these funds will aid in financing public policies that directly benefit the citizens of Chile.
The SII is actively addressing the evolving demands of the digital economy, recognizing the complexities it introduces for tax administrations globally. “Chile is among the nations taking proactive steps to adapt to these developments,” Figolett explained, “as we work to understand and implement measures for new business models.”
Non-Compliant Platforms Conversely, 92 platforms have been identified as non-compliant, having neither registered nor paid the required tax as of June 28, 2023, based on the latest report from the SII. While these companies do not maintain a domicile in Chile, they operate locally and have neglected to register within the simplified tax system.
In response to this situation, the SII has enacted a resolution to shift the responsibility of VAT withholding from businesses without a domicile in Chile to payment issuers (both banking and non-banking). As part of this new regulation, these issuers must submit semi-annual reports to the SII detailing the withholdings made. This measure is intended to enhance oversight and ensure compliance.
