ES
ENLegal source: Ley N° 21.210 (Modernización Tributaria)
If your foreign company sells digital services to end consumers in Chile, you must apply and declare VAT under a simplified regime. If your Chilean company contracts digital services from abroad, it generally operates under reverse charge: the Chilean company withholds and remits the VAT, not the foreign provider.
We already covered digital VAT from the perspective of the end consumer in Chile. This article addresses the other side: what it means for a foreign company providing digital services into Chile, or for your new Chilean company contracting digital services from abroad.
What if my foreign company sells into Chile?
Foreign providers of digital services to end consumers in Chile must apply and declare VAT under a simplified regime, without needing to incorporate a local entity solely for that purpose.
What if my Chilean company contracts digital services from abroad?
When a Chilean company (not an end consumer) contracts digital services from a foreign provider, it generally operates under a reverse-charge mechanism — the Chilean company withholds and remits the corresponding VAT, rather than the foreign provider doing so.
Why does this affect you as an investor?
If your newly incorporated Chilean company contracts software, digital marketing, or cloud services from providers outside Chile — something nearly universal for new companies — you need clarity from the start-of-activities stage on how that VAT is declared, so the mistake isn’t discovered at the first accounting review.
Frequently Asked Questions
No, a simplified regime exists without needing a local entity.
Generally the Chilean company, under the reverse-charge mechanism.
Yes, it's worth defining from the first month of operation.
How Izquierdo Deramond Consultores Can Help
At IDC we handle the accounting and monthly tax compliance of foreign-owned companies in Chile, including assessing which double tax treaties apply to your case. If you need support on this front, let’s talk or reach us on WhatsApp.
Legal notice: This article is provided for general informational purposes only. It does not constitute legal, tax, accounting, or other professional advice, and should not be relied upon as a substitute for professional advice tailored to your specific situation. Cited rules may change; always verify the current version. To discuss your case, please contact Izquierdo Deramond Consultores.