Chile demands VAT’s payment to foreign OTTs

Chilean Finance Minister, Felipe Larrain, announced that the initial proposal to apply a special tax for OTTs based in countries different from Chile will be replaced by one that contemplates the VAT’s payment, whose current rate is 19%.

‘The concept is that the same VAT, to which all the regimes without distinction are subject, will also have to be covered by digital services’, said Larrain, explaining that the measure allows ‘a fairer distribution of these companies taxes payments’.

The regulation will charge VAT to digital services provision by foreign companies used by Chileans. This way, Chile would not collect the income tax on the digital platforms operations in the country, until the Economic Cooperation and Development Organization (OCDE) decides on how to tax digital economy next year.