Chile – Updated 2026 List: VAT Withholding Regime for Foreign Digital Sellers

Chile belongs to the group of countries that have in place different modalities of tax framework implemented exclusively for the collection of tax on the transactions made by non-resident providers of digital services or digital platform facilitators. 

Non-resident digital service providers and non-resident digital platform operators are mandated (under specific conditions) to register for Sales and Services Tax (local VAT) under the simplified tax registration system. To enhance the country’s collection mechanism and maintain a level playing field, it has introduced, as a backup, a withholding VAT regime for these providers. 

The Chilean Internal Revenue Service introduced a VAT withholding regime for digital service providers a few years ago. Under this regime, the domestic payment service providers(credit and debit card issuers, and others) are mandated to charge, collect, and remit tax on behalf of the registered non-resident digital service providers and platforms. 

The Internal Revenue Service has a recurring obligation to update the list of unregistered digital service providers that should have been registered for VAT. Still, it hasn’t done so in accordance with the law. To prevent the non-collection of tax from these providers, the tax authority mandates that payment service providers act as tax collectors on their behalf. 

This list is generally updated on December 15 each year and, when necessary, during the following calendar year. The PSPs are mandated to start Sales and Service Tax collection from each digital service provider on the list beginning January 1 of the following year (after the list is published). 

This list is a reminder that Chilean tax authorities are closely monitoring transactions processed by non-resident digital service providers, the corresponding tax collection, and overall tax compliance. This significantly enhances the likelihood of identifying non-compliant behaviour among taxable persons and of enforcing penalties.