Sign up for tax alert emails    GTNU homepage    Tax newsroom    Email document    Print document    Download document

June 17, 2021

Chilean tax authorities are evaluating foreign service providers’ compliance with recently enacted VAT on digital services

Foreign service providers that provide digital services to individuals in Chile must register for the simplified value-added tax (VAT) regime and withhold a 19% VAT on the payment for digital services. Noncompliance could trigger audits from the tax authority and withholding through credit card issuers.

The Chilean tax authorities have recently emailed foreign service providers that may be providing digital services to Chilean users and are not in compliance with current legislation.


According to the Chilean VAT Law, the Chilean tax authorities are authorized to use any technological means of audit available to verify whether foreign service providers are in compliance with tax obligations related to digital services and the simplified VAT regime, regardless of where the information is located.

To determine the foreign service providers that may not be in compliance, the Chilean tax authorities established a portal through which foreign service providers that are not in compliance may be reported anonymously.

Additionally, the Chilean tax authorities issued two resolutions requesting Chilean banks and credit card issuers to report quarterly on the acquisition of services made by Chilean customers from foreign service providers and paid with their credit cards or other analogue payment systems (note that banks have been reporting this information since June 2020 and financial institutions that are not banks since October 2020).

Noncompliance with registration requirement

Based on the information the Chilean tax authorities have received, they have emailed several foreign service providers that may be providing digital services to Chilean users and are not registered in Chile for purposes of declaring and paying VAT, if applicable.

Not complying with the Chilean rules may result in intermediary entities (i.e., Chilean banks or credit cards issuers) being responsible for collecting the VAT if not declared by foreign service providers.


Foreign service providers that have not already registered for the simplified VAT regime, or have not analyzed whether their services fall within the scope of these new provisions, should register, as noncompliance could result in an audit or withholding from third parties on the payment of digital products from Chilean customers.

For more information on the VAT on digital services, see EY Global Tax Alert, Chile: VAT on digital services enters into force, dated 3 June 2020.


For additional information with respect to this Alert, please contact the following:

EY Chile, Santiago
Ernst & Young LLP (United States), Latin American Business Center, New York
Ernst & Young LLP (United Kingdom), Latin American Business Center, London
Ernst & Young Abogados, Latin American Business Center, Madrid
Ernst & Young Tax Co., Latin American Business Center, Japan & Asia Pacific

The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting or tax advice or opinion provided by Ernst & Young LLP to the reader. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader's specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. The reader should contact his or her Ernst & Young LLP or other tax professional prior to taking any action based upon this information. Ernst & Young LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.


Copyright © 2024, Ernst & Young LLP.


All rights reserved. No part of this document may be reproduced, retransmitted or otherwise redistributed in any form or by any means, electronic or mechanical, including by photocopying, facsimile transmission, recording, rekeying, or using any information storage and retrieval system, without written permission from Ernst & Young LLP.


Any U.S. tax advice contained herein was not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions.


"EY" refers to the global organisation, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.


Privacy  |  Cookies  |  BCR  |  Legal  |  Global Code of Conduct Opt out of all email from EY Global Limited.


Cookie Settings

This site uses cookies to provide you with a personalized browsing experience and allows us to understand more about you. More information on the cookies we use can be found here. By clicking 'Yes, I accept' you agree and consent to our use of cookies. More information on what these cookies are and how we use them, including how you can manage them, is outlined in our Privacy Notice. Please note that your decision to decline the use of cookies is limited to this site only, and not in relation to other EY sites or Please refer to the privacy notice/policy on these sites for more information.

Yes, I accept         Find out more