The Chilean IRS issued a clarification on VAT exemption for exported services

The Internal Revenue Service (IRS) of Chile published a document Letter No. 2511 containing the clarifications on VAT exemption for export services. Accordingly to those rules, a Chilean consultancy company offering administrative business management services to a foreign company is exempt from VAT as stated in the list of export services by virtue of Article 12, letter E, No. 16, of the Law on Sales and Services Tax (LIVS) maintained by the National Customs Service (Servicio Nacional de Aduana).

According to the National Customs Service, a service is VAT exempt if:

1. The export is carried out totally or partially in Chile to the residents of other countries for overseas use;
2. The services are included in the list of exempt services;
3. The services are subject to VAT and,
4. The service provider is a VAT taxpayer.

Since June 2020, the Chilean IRS (in Chilean Servicio de Impuestos Internos or SII) has provided publications of the regulation and rulings on the taxation of digital services. Foreign digital service companies have had VAT registration and collection obligations for their sales to apply, collect and remit 19% VAT to Chile-based customers since the introduction of the rules.

Source: Internal Revenue Service (SII) of Chile, Letter No. 2511

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