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Chile confirms foreign software liable to VAT

Chile has confirmed that software sold by non-resident providers to Chilean buyers is subject to Value Added Tax.

Chile imposed 19% VAT on foreign sourced digital services in June 2020. This included downloaded software, gaming, online advertising etc. It did provide a simplified VAT registration service, with no right to deduct any local VAT incurred.

The tax office has now reconfirmed that software licenses are not subject to withholding tax, and so is therefore liable to VAT.  This obliges the providers to VAT register and provide a sales invoice.

You can check the right VAT calculations on individual or batch transactions with our Advisor and Auditor services.

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Central and South America VAT on digital services

Comments (click for details) Rate Date Threshold Comments
Argentina 21% Apr 2018
Bahamas 10% Jan 2015 BSD 100,000
Barbados 17.5% Dec 2019 BBD 200,000
Bolivia 13% Nov 2022 -
Brazil n/a n/a n/a Various proposals
Chile 19% Jun 2020 Nil
Colombia 19% Jan-18 Nil
Costa Rica 13% Oct 2020 Nil Withholding VAT option
Dominican Republic 18% 2023? Nil Currently withholding VAT
Ecuador 12% Sep 2020
El Salvador 13% 2022 - Replace Withholding VAT
Guatemala 12% TBC
Honduras 15% 2022 HNL 250,000
Panama 10% 2022 Withholding VAT
Paraguay 10% Jan-21 Nil Withholding VAT; 4.5% DST
Peru 18% 2022 Nil Withholding VAT
Puerto Rico 10.5% Jan 2020 $100,000; or 200 transactions Marketplaces
Uruguay 22% Jan 2018 Nil VAT and Withholding Tax

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