Worldwide VAT, GST and Sales Tax Guide
Santiago GMT -4
EY
Street address:
Mail address: Presidente Riesco 5435, 4th Floor
Casilla 2823
Santiago Santiago Chile Chile
Indirect tax contacts
Alicia Domínguez +56 (2) 2676-1416 alicia.dominguez@cl.ey.com
Nicolas Grof +56 (2) 2676-1216 nicolas.grof1@.ey.com (Chilean desk based in the United States)
Ignacio Pérez +56 (2) 2676-1109 ignacio.perez@cl.ey.com
Matías Moroso +56 (2) 2676-1800 matias.moroso@cl.ey.com
A. At a glance
Name of the tax
Value-added tax (VAT)
Local name Impuesto al Valor Agregado (IVA)
Date introduced 31 December 1974
Trading bloc membership MERCOSUR Pacific Alliance
Administered by Internal Revenue Service [Chilean IRS] (Servicio de Impuestos Internos [SII], http://www.sii.cl)
VAT rates
Standard 19%
Other
Exempt and additional taxes (ranging from 15% to 50%)
VAT number format Tax identification number (RUT), which is used for VAT and other tax purposes (for example, 12.345.678-0)
VAT return periods Monthly
Thresholds
Registration None
Recovery of VAT by non-established businesses No
B. Scope of the tax
In general, VAT is imposed on the sale of tangible goods located in Chile and on the provision of services rendered or utilized in Chile. The following are significant aspects of the VAT rules in Chile:
• For VAT purposes, the law provides that “sales” are all transactions that result in the transfer of movable and immovable tangible goods (excluding land). A seller is any person that habitually carries out this kind of operation.
list unless they are registered in due course, pay the entire amount of VAT due or demonstrate that all supplies were engaged with VAT taxpayers (for which the obligation to withhold and report VAT is for the Chilean entity).
On the other hand, for services rendered to Chilean VAT taxable persons (B2B transactions), the reverse-charge mechanism applies (see the Reverse-charge section below).
Services subject to withholding tax are normally VAT exempted. However, a detailed analysis is required to determine if withholding tax applies to a certain service
Tax representatives. A tax representatives must be provided with the power to represent the business in its dealings with the tax authorities and must also register an address in Chile for this purpose. If foreign individuals are appointed as the tax representatives, in addition to the obligation to register an address in Chile, they must also be in possession of a valid visa that allows them to act in this capacity.
Reverse charge. In certain circumstances, for example, if the supplier is a foreign taxable person and does not have any PE or established business in Chile and the transaction is subject to VAT, the law states the obligation to withhold VAT turns to the purchaser. The purchaser issues a “purchase invoice” and collects VAT on behalf of the foreign supplier.
Domestic reverse charge. Domestic reverse charges are available in Chile only when the law or the national director of the Chilean IRS establishes a “change of the taxable person.” Cases that involve a domestic reverse charge normally are related to particularly exceptional situations in informal/undeveloped markets where there is a lack of tax compliance (e.g., multilevel marketing schemes that include multiple transactions among individuals before the products are purchased by end consumers, sales of metal scrap and agro-products from small producers).
Digital economy. In accordance with current regulation, the following digital remunerated services, performed by providers domiciled or residing abroad, are subject to VAT:
• The intermediation of services provided in Chile, whatever their nature, or of sales made in Chile or abroad, provided that the latter give rise to an import.
• The supply or delivery of digital entertainment content, such as videos, music, games or other analogous content, by means of downloading, streaming or other technology, including for these purposes texts, magazines, newspapers and books; the tax authority has stated in Rulings 16602023/1609-2023 and 2064-2021 that in the case of this taxable event, the subscription to electronic magazines provided by a nonresident supplier is subject to VAT regardless of the fact that the purpose of the same is not entertainment but education, since the taxable event is the digital content, within which are the “digital magazines.”
• The provision of software, storage, or computing platforms or infrastructure.
• Advertising, regardless of the medium or means through which it is delivered, materialized or executed.
• As mentioned above, as of 1 November 2025, online marketplaces and platforms located in Chile or outside the country that both sell goods and/or provide services from abroad to taxpayers located in Chile will be subject to VAT as Chilean taxpayers; however, this liability will not apply if the underlying seller or services providers are Chilean taxpayers; furthermore, this will not take place if the Chilean client (acquirer or beneficiary of the services) is a Chilean VAT taxpayer.
The liability for addressing the filing of the VAT will depend on the nature of the transactions and withholding tax position.
B2C digital services described above are always exempted from withholding tax and are, therefore, subject to VAT under the above simplified regime.
For services rendered to a Chilean VAT taxable person, the reverse-charge mechanism explained above applies.
Services subject to withholding tax are normally VAT exempted. However, a detailed analysis is required to determine if withholding tax applies to a certain service.
Imported goods that are acquired online are subject to VAT at the standard rate, to be paid by the importer. A foreign seller or intermediary may voluntarily request to declare and pay said tax through the simplified regime mentioned above.
Registration procedures. Every legal entity or individual that performs activities subject to income tax must register and obtain a tax identification number (RUT). Form 4415 must be completed, signed and filed before the Chilean IRS, electronically (www.sii.cl) or by hard copy.
In general terms, a legal entity must fulfill the following requirements: i) prove that it is legally incorporated by means of the public deed certificates of good standing, existence or validity –duly apostilled and translated into Spanish if required – and ii) prove that it has one or more legal representatives domiciled or resident in Chile. If the taxable person is acting through an agent or representative, it must also show the power of attorney – duly apostilled or authorized before a notary public (defending the case) – that grants the person such powers.
For VAT purposes, the Chilean IRS always will have to check the domicile and activities described in Form 4415 before authorizing VAT documentation (invoices, notes, dispatch orders, etc.). A simplified registration procedure has to be followed by the foreign digital service providers that are subject to the simplified VAT regime, which is done online on a digital VAT portal of the Chilean IRS.
Deregistration. As the RUT is for VAT and other tax purposes, there are no specific deregistration rules for VAT.
Changes to VAT registration details. Any change in the name of a taxable person, address or any other modification of the information given to the Chilean IRS, the Chilean IRS must be notified of it within two months through the tax electronic folder, which will contain a form with the information to be filed and that the Chilean IRS will make available for every taxable person online. After the notification is done, the Chilean IRS will have to modify the pertinent information.
D. Rates
The term “taxable supplies” refers to supplies of goods and services that are liable to a rate of VAT.
The VAT rates are:
• Standard rate: 19%
Also, additional taxes ranging from 10% to 50% may be imposed under the VAT law on the provision of specific items. Some of the taxed items and applicable rates are jewelry (15%); alcoholic beverages (from 20.5% for fermented to 31.5% for distilled); soft drinks with high sugar content (18%); other natural or artificial soft drinks, including energy or hypertonic drinks (10%); and 50% over the first sale or import of pyrotechnic items.
The term “exempt supplies” refers to supplies of goods and services that are not liable to VAT and that do not qualify for input tax deduction. However, while the supply of exports of goods is exempt, exporters can recover input tax.
Examples of exempt supplies of goods and supply of services
• Used motorized vehicles
• Importation of goods by the National Ministry of Defense
• Certain real estate transactions
• Admission to artistic, scientific or cultural events subject to certain requirements.
• Premiums for or payments from life insurance contracts
Examples of items for which input tax is deductible (if related to a taxable business use)
• Input tax is deductible on every item that complies with the requirements (subject to VAT and related to a taxable business use).
Partial exemption. Input tax cannot be recovered if it relates to exempt or nontaxable activities. VAT taxable persons that carry on both taxable and nontaxable or exempt activities may not recover input tax in full. This situation is referred to as a “partial exemption.” The percentage of input tax that may be recovered is calculated based on the value of taxable operations carried out during the period, compared to total turnover. These rules apply to any type of input tax incurred, whether it is generated by the acquisition of inventory, general expenses or capital goods. Approval from the tax authorities is not required to use the partial exemption standard method in Chile. Special methods are not allowed in Chile.
Capital goods. No special input tax rules apply for input tax incurred on capital goods. If the usage of capital goods is split between taxable and exempt, a split calculation must be carried out, in line with the partial exemption rules (see above).
Refunds. If the amount of input tax (VAT credit) recoverable in a certain period (a month) exceeds the amount of output tax (VAT debit) payable, the excess credit may be carried forward to offset output tax in the following tax periods.
If a VAT taxable person pays excess VAT as the result of an error, it may request a refund of the overpaid amount from the tax authorities. Taxable persons may request a refund of the overpaid tax within three years after the end of the period for which the claim is made.
Pre-registration costs. Input tax incurred on pre-registration costs in Chile is not recoverable.
Bad debts. Output tax accounted for on supplies that do not get paid by the recipient (i.e., bad debts) can be recovered in Chile. No special conditions apply. VAT can be recovered, regardless the actual payment of the accounts receivable or the accounts payable.
Noneconomic activities. Input tax incurred in relation to noneconomic activities is not recoverable in Chile.
G. Recovery of VAT by non-established businesses
Input tax incurred by non-established businesses that are not registered for VAT in Chile is not recoverable. Chile does not refund VAT incurred by businesses that are neither established nor registered for VAT purposes in Chile unless the VAT was paid as a result of an error.
H. Invoicing
VAT invoices. A taxable person must generally provide a tax invoice for transactions subject to VAT, including exports. A tax invoice is necessary to support a claim for input tax deduction. Invoices must be issued in Chilean pesos (CLPs).
Credit notes. A VAT taxable person may also issue credit notes for rebates, discounts or transactions voided with respect to the acquirer of the goods or beneficiary of the services. A credit note must contain the same information as a VAT invoice.
A VAT taxable person may also issue debit notes for increases in the tax basis of VAT. A debit note must contain the same information as a VAT invoice.
Electronic invoicing. Electronic invoicing is mandatory in Chile for all taxable persons.
Scope of electronic invoicing. For B2B, B2C and business-to-government (B2G) supplies, electronic invoicing is mandatory for all taxable persons in Chile. There is no threshold beyond which
taxable persons are required to adopt electronic invoicing in Chile. Generally, taxable persons must issue electronic invoices for transactions with other sellers, importers and service providers (B2B). This includes B2G supplies. These documents must be issued in the case of transactions subject to and non-subject to VAT. For B2C supplies, it is mandatory for suppliers to issue an electronic bill and receipt. An electronic bill is a type of tax document that is issued for sales or services rendered for B2C supplies. An electronic bill does not entitle the customer to a VAT tax credit. Since 2014, the law states that vouchers generated for transactions paid by electronic payment methods (credit cards or other options) are equivalent to the issuance of an electronic bill.
The above rules also apply for other tax documents, such as debit notes, credit notes, purchase invoices, etc. There are some exceptions for taxable persons whose transactions are carried out in geographical areas without mobile data connection or electricity.
Simplified VAT invoices. Simplified VAT invoicing is not allowed in Chile. As such, full VAT invoices are required. However, taxable persons subject to the simplified VAT regime that applies to foreign digital service providers are exempted from issuing invoices.
Self-billing. Self-billing is not allowed in Chile.
Proof of exports. Chilean VAT does not apply to the export of goods. However, to qualify as VATfree, exports must be properly supported by evidence confirming that the goods have left Chile. Invoices for export transactions must be issued in accordance with the regulations established by the National Customs Service and must be stamped by the Chilean Internal Revenue Service.
Foreign currency invoices. Generally, invoices must be issued in the domestic currency, which is the Chilean peso (CLP). Equivalent sums in foreign currency can be expressed in the detail lines of the document using the exchange rate of the day of issuance. However, as an exception, export invoices may be issued in foreign currency.
Supplies to nontaxable persons. VAT taxable persons must issue a till receipt (una boleta) to final customers for goods sold or services rendered. However, the Chilean IRS may permit small merchants and service providers that sell products or render services directly to the public to not issue till receipts for those types of transactions. A till receipt is not required for sales valued at less than CLP180.
Moreover, certain taxable persons may obtain an authorization from the Chilean IRS to be exempted from the obligation to issue till receipts for sales made through vending machines.
Records. In Chile, examples of what records must be held for VAT purposes include tax returns, invoices, notes, dispatch orders, registry of sales and purchases and other related reporting obligations. In Chile, VAT books and records can be kept outside the country.
Record retention period. Taxable persons must keep a record of invoices issued and received on the Chilean IRS website for six years. However, for income tax purposes it is advisable to keep documentation from the date tax losses have been generated.
Electronic archiving. Electronic archiving is allowed in Chile. Taxable persons may keep their VAT records in Chile or abroad, either electronically or on paper. Also consider that VAT documentation (e.g., tax returns, invoices, notes, dispatch orders, registry of sales and purchases, other related reporting obligations) will be kept in the Chilean IRS’s online system. The Chilean IRS online system (the electronic purchase and sales registry) in which the electronic invoices issued by or to a taxable person are registered automatically. There is no limitation for taxable persons to maintain or store their VAT records in Chile or abroad.
I. Returns and payment
Periodic returns. VAT returns are submitted for monthly periods on Form 29. VAT returns are due by the 12th day of the month following the end of the return period. For taxable persons that issue