The Chilean Internal Revenue Service (SII) issued Official Letter No. 2627 of 2025 regarding the application of Value Added Tax on services provided by foreign entities and the possibility of recovering the charged tax under Chilean regulations.
The Chilean Internal Revenue Service clarified that services rendered by foreign entities and used within Chile may be subject to Value Added Tax according to the Law on Sales and Services Tax.
If the foreign provider is not registered under Chile’s simplified tax regime for non-resident digital service providers, the obligation to declare and pay the tax may fall either on the foreign entity or on the Chilean beneficiary of the service, depending on the specific legal circumstances.
The authority also stated that, in certain cases, taxpayers may request authorization to withhold and pay the corresponding tax through the issuance of a purchase invoice.
Additionally, the application of Value Added Tax depends on whether the payments made abroad are also subject to additional withholding tax under Chilean income tax regulations. Certain services may qualify for exemptions under double taxation treaties or specific provisions of Chilean tax law.
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