Chile imposes VAT on foreign electronic services

28 February 2020

From 1 May 2020, Chile will extend its Value-Added Tax (VAT) system to cover digital services supplied by non-resident (foreign) companies to consumers in the country.

Currently, foreign businesses providing digital services to consumers in Chile do not have to charge VAT on their sales. However, in an effort to remove the unfair advantage this gives to non-resident companies over resident providers, the Chilean government announced that VAT at 19% will be applied to these types of transactions.

This new tax will be applied to a range of electronic services including streaming games, music, apps, films, e-books, e-journals and internet services.