Chile VAT

We charge 19% VAT for customers from Chile

Table of Contents:

1. What is VAT?
2. Who has to pay VAT?
3. Why am I being charged VAT?
4. What is a TAX ID Number?
5. What happens if I do not have a Tax ID Number?
6. How does Murf determine which customers Chilean VAT applies to?
7. Is there any threshold for VAT on electronically supplied services (ESS)?
8. Are there any VAT obligations for me as a customer?

What is VAT?

VAT is the abbreviation of Value Added Tax. VAT is in general due when goods and/or services are sold. It applies to most goods and services that are bought and sold for use or consumption in Chile. It is a consumption tax because it is ultimately borne by the final consumer.

Who must pay VAT?

Generally, VAT is invoiced by the supplier that is selling goods or services and collected from the customer. Subsequently, the supplier reports and remits the collected VAT to the tax authorities.

Where electronically supplied services (ESS) are provided by a supplier that is non-resident in Chile (as is the case for Murf) the responsibility to collect and remit VAT depends on whether the customer carries out activities that are subject to VAT in Chile.

If the customer does not carry out activities that are subject to VAT in Chile (i.e. individuals and legal entities that are not subject to VAT on their activities), VAT shall be collected on the supplies made to the customer by Murf. If the customer carries out activities that are subject to VAT in Chile (this could be both individuals and legal entities), VAT shall be self- assessed, under the reverse charge mechanism, by the customer.

Why am I being charged VAT?

Under Chilean VAT rules, Murf is required to collect and remit Chilean VAT on services provided to customers who do not carry out activities that are subject to VAT in Chile.

Customers who carry out activities that are subject to VAT in Chile may need to self-assess VAT on the services purchased from Murf.

What is a TAX ID Number?

A TAX ID Number is a unique 9-digit number (XX.XXX.XXX-X) that identifies a person or entity as being registered for VAT and other tax purposes in Chile.

What happens if I do not have a Tax ID Number?

If a customer in Chile is unable to supply a valid Tax ID Number which indicates that they carry out activities in Chile that are subject to VAT, Murf will charge and collect Chilean VAT on its supplies to you.

How does Murf determine which customers Chilean VAT applies to?

Murf will treat any customers with a ‘Sold To’-address in Chile as being resident in Chile This information is subject to cross-referencing against other data to verify that the ‘Sold To’ country is accurate.

It is your responsibility as a customer to ensure that your ‘Sold To’-address is accurate.

Is there any threshold for VAT on electronically supplied services (ESS)?

No, VAT applies to all sales of Murf’s services in Chile where the customer does not carry out activities that are subject to VAT in Chile.

Are there any VAT obligations for me as a customer?

Customers who carry out activities that are subject to VAT in Chile may need to self-assess VAT on the services purchased from Murf.

If you provide a valid Tax ID number that indicates that you carry out activities that are subject to VAT in Chile, no VAT will be charged to you.

You are required to notify Murf if there is a change in your VAT status.