Chile VAT: new regulations for business to consumer sales transactions on digital marketplaces

Manuel Alcalde Peñafiel
Carey Abogados, Santiago de Chile
malcalde@carey.cl

Javiera Álvarez Altamirano
Carey Abogados, Santiago de Chile
jalvarez@carey.cl

As a measure to tackle the informal economy and tax evasion and to promote fair trade, Law No 21,713 on Compliance with Tax Obligations, enacted on 25 October 2024, incorporates relevant changes on the tax treatment applicable to the international business to consumer (B2C) digital trade of goods. As a result, the responsibility for value-added tax (VAT) collection on imports of low-value goods is shifted from customs authorities to the digital intermediation platforms facilitating such transactions. The specifics of these new regulations are set out below.

The changes introduced by the new law

Effective from October 2025, the law removes the tax exemption that applied to imports below US$41 meaning that they were exempt from VAT and custom duties, so VAT will now have to be collected on all B2C parcels, including lower value items. According to estimates by the Ministry of Finance, this measure could increase tax revenues by approximately US$40m, considering that in 2023 approximately 20 million packages were imported into Chile, 90 per cent of which were valued at US$40 dollars or less.[1] The law also introduces a new custom duty exemption for the import of goods when the purchase price of such goods does not exceed US$500, including any ancillary fees charged during the transaction.  

In addition, the law establishes that tangible movable goods located abroad acquired remotely for a non-resident by a person who is not a VAT taxpayer will be deemed as located in Chile for VAT purposes provided that such goods are destined for Chile and their purchase price does not exceed US$500. As a general rule, a person is not a VAT taxpayer if they are not a trader or reseller of the purchased goods (otherwise, if the purchaser is a VAT taxpayer and the seller is a non-resident, a reverse-charge mechanism applies). This means that VAT must be collected ‘in advance’ by the seller at the time of the online purchase, irrespective of when the goods will actually enter Chile.

If the transaction takes place through a digital intermediation platform, VAT must be collected by the platform operator (whether such operator is an entity or an individual, national or foreign), who will be regarded as a VAT taxpayer and will equate to the underlying seller. The law defines a ‘digital intermediary platform’ as an internet interface that facilitates third-party sales or services, excluding platforms that only provide advertising or payment processing services. Moreover, the law specifies that if more than one digital intermediation platform jointly or simultaneously facilitates the same transaction, only the platform that authorises or processes the payment for the transaction will be considered as the VAT taxpayer.

To declare and pay the necessary VAT, operators of foreign digital intermediation platforms must enrol in the Simplified Tax Regime,[2] which is currently applicable to foreign providers of digital services, including those involved in service intermediation, software provision, digital entertainment and advertising. As of February 2024, the VAT applicable to digital services, which came into effect in June 2020, had generated more than US$1bn in revenue, with over 400 foreign digital service providers registered, according to data published by the Chilean Internal Revenue Service.[3]

If the digital platform fails to enrol in the Simplified Tax Regime, the Chilean Internal Revenue Service is empowered to require the issuer of the payment cards involved in the provision of funds, debit, credit or other similar payment systems to collect, declare and pay the applicable VAT when the relevant transactions are settled through such payment systems.

Finally, the law stipulates that digital platform operators facilitating transactions between third parties for the purchase of goods or services must verify the initiation of such activities and the tax compliance of sellers offering their products or services on the relevant platform, provided that they are Chilean taxpayers. This obligation can be waived if sellers declare that their activities are not subject to the business commencement obligation.