The Chilean tax authority (Servicio de Impuestos Internos - SII) has issued Resolution No. 46 of 13 May 2022, which establishes new rules for VAT withholding on payments for digital services. Rules for the collection of VAT on digital services by non-resident providers were introduced on 1 June 2020, with the non-resident provider required to collect and remit VAT under a simplified regime when the customer is not a taxable person for VAT purposes. Resolution No. 46 supplements these rules by providing that intermediaries in Chile that are involved in payments for digital services must withhold and remit the VAT due on the payment. The requirement applies for banks and other issuers that allow payments to be made to digital service providers outside Chile through credit cards, debit cards, and other similar payment methods. The withholding requirements are effective from 1 August 2022 and apply for payments charged from that date.
For the purpose of the new withholding rules, the SII also issued Resolution No. 49 of 31 May 2022, which approves a list of 32 non-resident providers that are subject to withholding by banks and other issuers. This generally includes providers that have either not registered for the simplified regime or have not fulfilled their obligations. Once listed, a non-resident provider may only be removed if the provider registers and pays the VAT due, pays all outstanding amounts due, or proves that their customers in Chile are exclusively VAT taxpayers. The list will be maintained on the SII website (www.sii.cl) and updated on 15 December each year. Revisions to the list for providers that meet the conditions for removal will be published quarterly and apply from the first day of the following month.