Tax rate by region Chile

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The information provided on this page is intended for general informative purposes only. It should not be interpreted as tax advice, nor is it meant to be. For advice on your particular tax responsibilities, consult with an experienced tax expert. PayPro Global does not assume any responsibility for any action taken or not taken based on the information presented here.

Understanding SaaS Sales Tax in Chile: A Comprehensive Guide

Chile implemented a Value-Added Tax (VAT) system in 1975, primarily to enhance tax collection and bolster economic growth. This comprehensive tax system applies to various goods and services, including Software as a Service (SaaS). Currently, the standard VAT rate in Chile is 19%, applicable to most SaaS offerings. It’s crucial for SaaS businesses operating in Chile to understand their VAT obligations and comply with the regulations to avoid penalties or disruptions.

While there’s no specific exemption for digital services like SaaS, certain transactions may qualify for exemptions. For instance, payments made to foreign residents for services and royalties subject to withholding tax are exempt from VAT in Chile. However, it’s crucial to consult with a tax professional to determine your specific exemption eligibility.

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Chile

Chile implemented a VAT system in 1975, focusing on improving tax collection and supporting economic growth.

Official government link: Servicio de Impuestos Internos

19.00%

E-products and services VAT/Sales tax rate

Reduced tax rate product categories

No specific reduced tax rates for digital goods and services

Exempted product categories

There is no specific exemption for digital goods and services. However, amounts paid to foreign residents for services and royalties that are subject to withholding tax are granted a VAT exemption in Chile

Reverse charge mechanism for B2B sales

Yes

Tax ID validation required

Yes

When do you have to register

A non-resident company must register when it provides digital services or sells goods to customers in Chile.

Online registration possible

Yes

Local representative needed

Yes

Registration procedure

The registration process is quite straightforward. All you need to do is submit the registration form on the tax website. Upon registration, a personal account will be created for you, which you will use to file your tax returns.

During registration, you must specify the currency type (US dollars, Euros, or Chilean pesos) and the frequency of declaration and payment. Once these choices are made, they cannot be altered until the first day of the following year, January 1.

List of digital and electronic services liable for tax

Digital entertainment content encompasses audiovisual services, music, games, and similar formats delivered through methods such as downloading, streaming, or other technologies. This includes texts, magazines, newspapers, and books aimed at entertainment purposes. Software, along with associated storage solutions, platforms, and computing infrastructure essential for digital services, is also included. Advertising delivered through various channels and formats, regardless of the specific means of execution or delivery, is another key component.

Penalties

In case of late payment and filing of the VAT return in Chile penalties 1.5% per month are applied. Fines equal to 10-60% of the tax due are also levied.

Registration threshold

No threshold, non-resident companies must register for VAT

Filing interval

Monthly/quarterly

Filing deadline

The first 20 days of the month following the period

E-invoicing requirements

Yes

Record keeping

Financial statements such as balance sheets, income statements, and cash flow statements, as well as any necessary receipts, invoices, and other tax-related documents.

How-To Guides: Chile SaaS VAT

Step: 1 Threshold

Effective June 1, 2020, Chile requires non-resident vendors of digital services to consumers (B2C) in Chile to register for and collect VAT, regardless of the sales amount.

Step: 2 Business Registration

Non-resident digital service providers must register under Chile’s simplified VAT regime through the Servicio de Impuestos Internos (SII) Digital VAT Portal (online). Registration requires entering taxpayer info, type of activity, tax period choice (monthly or quarterly), and contact data; upon acceptance, a user number is issued.

Step: 3 TIN/VAT Number

The Chilean tax identification is the Rol Único Tributario (RUT) issued by SII; non-residents register through the Digital VAT Portal and obtain a form of tax ID of the simplified regime.

Step: 1 Standard VAT Rate

Standard VAT rate is 19%.

Step: 2 VAT Formula

To calculate your tax amount, consider the following formula:

 

TaxAmount = NetPrice × 19%

Step: 3 Reverse Charge (B2B)

For B2B cross-border services, VAT is generally not charged by the non-resident provider if the Chilean business customer is a VAT taxpayer and provides a valid local VAT ID (RUT); the local Chilean customer must self-assess VAT under the reverse charge mechanism in their own VAT return.

Step: 1 Selling B2C

Non-resident SaaS/digital services sold to Chilean final consumers (individuals or non-VAT taxpayers) are subject to 19 % VAT, which the non-resident provider must charge and collect at point of sale and remit under the simplified VAT regime.

Step: 2 Selling B2B

For business customers with valid Chilean VAT registration, VAT is not charged by the provider; the Chilean buyer must account for VAT (reverse charge) in their own VAT filing.

Step: 3 Invoice Requirements

Under the simplified regime, non-residents are not required to issue Chilean VAT invoices (the simplified regime releases them from issuing formal VAT documents), though compliant invoicing for B2B to support reverse charge may still include:

  • supplier name
  • RUT of buyer (if applicable)
  • sequential invoice number
  • description of service
  • net amount
  • VAT amount and total.

Step: 1 Filing Interval

VAT under the simplified digital regime is filed monthly or quarterly (taxpayer elects).

Step: 2 Filing Deadline

Returns and payments are due by the 20th day of the month following the end of the period.

Step: 3 Submission

Submit through the SII Digital VAT Portal (Form F129). Payments can be made in CLP, USD or EUR; foreign currency payments require SWIFT/BIC transfers.

Step: 4 Record Keeping

While non-residents in the simplified regime are exempt from detailed local VAT bookkeeping, B2B transactions should have supporting documentation; general business records should be retained per Chilean standards (often 6 years for invoices/e-records under local law). Specific record-keeping statute not always detailed in simplified regime documents.

PayPro Global Solution: Simplified Registration & Fiscal Representation

Navigating Chile’s VAT registration and fiscal representation can be daunting. PayPro Global acts as your Merchant of Record, handling these complexities, including VAT registration and fiscal representation where needed, so you can focus on your business.

Learn more about our MoR services.

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