If you’re selling digital services and products to customers in [Name], then you might be liable for Chile’s Value-added Tax (VAT). This guide covers two very important parts of the system:
- Registering for the tax, and then
- Filing tax returns on time.
We’ve scoured Chile’s Servicio de Impuestos Internos (SII) website to provide you with all the necessary information about VAT for international businesses in one place.
How to register for VAT in Chile
Chile has a ‘Simplified Tax Regime’ for foreign businesses selling digital services in the country.
This comes with the Digital Services VAT Portal, which allows you to register online. The system is available in English, in addition to Spanish, so that’s helpful, too. (This portal is also where you’ll file and pay your tax returns. More on that later!)
Fill out and submit the VAT registration form found here. It’s just 5 simple steps.
Before you get started, make sure you have this info handy:
- Tax ID number from your home country
- All business other details like phone, email, address, URL, etc.
- The contact information for two other people who work in your business, in case you can’t be reached
Also, you’ll need to decide two very important things at the outset:
- The currency you want to file in. Your options are Chilean pesos (CLP), US dollars, or euros.
- The frequency you want to file. Your options are monthly or quarterly.
Note: Once you submit these preferences, you can’t change them until January 1 of the following year!
You’ll receive an email with a verification code to validate your address.
Once validated, you’ll receive a User Number and can set a password for your account. This User Number will identify your business from here on out. Now you’re all set to access the Digital Services VAT Portal in the future.
Describe what they should expect after, such as response time and receiving a tax number:
e.g. “After your application is reviewed and approved, you should receive a [Tax Acronym] registration number. This is a unique identifier they’ll use to identify you in the system, and which you’ll need to put on invoices, etc.
The website doesn’t state how long you should expect to wait, but if you have any questions, you can email them at IVASD.Chile@sii.cl.
How to file VAT returns in Chile
You can file in CLP, USD, or euros. If you’re conducting business in any other foreign currencies, be sure to convert it to one of these three!
When to file and pay
You must file a VAT return at regular intervals throughout the year. As we mentioned above, you can choose between monthly or quarterly declarations.
Whichever interval you choose, the due date for filing and paying is always the 20th day of the month following the end of the reporting period.
Note: If you haven’t made any income from Chilean customers during a certain tax period, then it is not mandatory to file. No “Nil declaration” here!
How to file
Before you get started, you should collect all the information about your taxable sales in Chile during the previous quarter. The tax website suggests having these pieces ready:
- total sales and income
- total purchases and expenses
Then you can file online in the Digital Services VAT portal. You can access it by clicking ‘Send Declaration’ on this SII page.
Fill out Form 129. You can take a sneak peek at the form below, and you’ll find in-depth guidance in English here.
Once submitted, the system automatically displays a filing certificate. If you need a copy of this for your records, go to the “Check Status” menu of your portal account.
How to pay
When it comes to payment, you can transfer the amount you owe in three different currencies: Chilean pesos, US dollars, or the Euro.
For declarations in foreign currency, the corresponding tax must be paid via SWIFT transfer, which is identified by a SWIFT code or BIC code (Bank Identifier Code). This code identifies the receiving bank when making an international transfer.
Further payment instructions will automatically appear on the screen after you file.
What to do in between registering and filing?
Well, you must comply with all the rules for Chilean VAT! That means charging 19% VAT on all B2C sales in the country, among other things.
For further reading that will help you stay compliant and successful as a remote seller, check out our Chile VAT Guide for Businesses.
Note: At Quaderno we love providing helpful information and best practices about taxes, but we are not certified tax advisors. For further help, or if you are ever in doubt, please consult a professional tax advisor or the Tax Agency.