Chile: Clarifications on the VAT tax credit for fuel used in electric generators
The VAT tax credit restrictions on the purchase of fuels used for electric generators that power a business selling frozen food were clarified in Letter No. 1849 from the Chilean Internal Revenue Service. A Chilean company wanted to know if VAT credits could be claimed for purchasing fuel and using it in the frozen food business.
The tax authority made it clear that a taxpayer may claim the VAT tax credit under two conditions:
- they must be a VAT taxpayer or exporter and
- they must not use fuel for motorized vehicles that travel on public roads, streets, or highways.
