Crypto-exchanges feature in Chile’s unregistered non-resident digital services provider list

International Tax Review is part of Legal Benchmarking Limited, 1-2 Paris Garden, London, SE1 8ND

Copyright © Legal Benchmarking Limited and its affiliated companies 2025

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Crypto-exchanges feature in Chile’s unregistered non-resident digital services provider list

Sponsored by

sponsored-firms-pwc.png
lorenzo-herrera-p0j-me6mgo4-unsplash.jpg

Sandra Benedetto and Jonatan Israel of PwC Chile explain why there is little surprise that crypto-exchanges have not been registered in the simplified mechanism for Chilean ISD.

One year has passed since the Chilean VAT on digital services (ISD) entered into force and a lot of developments in this particular area of Chilean tax law and practice have transpired since. The most recent of these developments is the publication issued by the Chilean IRS, listing entities that have not requested their registration in the non-resident digital services provider list. The publication of this list gives light on how assessments in Chilean ISD will follow in the near future, as will be explained below.

To put the discussion in context, with the 2020 tax reform, Chile introduced a modification to its VAT law in order to tax certain digital services that are rendered by non-resident or non-domiciled service providers. These services started to be subject to Chilean VAT at the general rate of 19%.

The core issue to determine Chilean ISD would be applicable to a given service, is to determine whether or not the beneficiary of the services is a VAT taxpayer, either in business-to-business (B2B) or in business-to-consumer (B2C) transactions. In this sense, the interaction of the VAT law and Chilean withholding tax (Impuesto Adicional) is very relevant.

For the cases where Chilean ISD is applicable and the recipient of the service is a non-VAT taxpayer (which is mostly the case for individuals, but it is also very common for companies), foreign taxpayers are allowed to register in a simplified registry. This simplified registry allows those foreign entities to charge the corresponding Chilean ISD to their customers and to pay the tax directly through a website that the Chilean IRS has setup. The registration in this simplified registry does not imply that the foreign taxpayer becomes a full-fledged taxpayer in Chile, and also it does not signify a presence in Chile for tax purposes.

A year has passed since the simplified Chilean ISD mechanism was introduced and to this date more than 200 foreign entities have duly registered and started charging Chilean ISD for the services rendered to Chilean beneficiaries. As was expected, the internet giants were some of the first in line to register.

Another line of action that the Chilean IRS has followed to get information on foreign digital service providers is making mandatory information obligations for the issuers of payment methods (banks and non-banking issuers). These issuers are obligated to report transactions of purchase of goods or services from sellers or service providers non-domiciled or non-resident with their respective payment solutions.

In this sense, the Chilean IRS has gathered information on foreign service providers that are registered in the simplified registry and has also gained access to other service providers which are not registered therein.

That is why, the Chilean IRS recently issued a list including 123 entities that have not registered in the simplified mechanism for Chilean ISD.

Among the service providers included in this list, which also contains betting sites, marketplaces and marketing services providers, some of the world’s largest cryptocurrencies exchanges were found.

The inclusion of these crypto-exchanges come as no surprise, since Chilean ISD includes within its taxable events the intermediation of services rendered in Chile, whatever its nature, or sales made in Chile or abroad, provided that they give rise to an import.

As noted in the beginning, the Chilean IRS has been very proactive in finding information regarding foreign service providers that may be subject to Chilean ISD and has also put in place other mechanisms to allow a constant flow of information on payments to detect entities that may be left out of the compliance with Chilean ISD.

That is why all service providers that are not domiciled or resident in Chile, but that may have Chilean customers or beneficiaries of their services, should look very carefully into their obligations to register in the non-resident digital services provider list and in general with Chilean ISD application, in order to avoid any unwanted assessment by the Chilean tax authorities.

  



Sandra Benedetto

Partner, PwC Chile

E: sandra.benedetto@pwc.com

  

Jonatan Israel

Manager, PwC Chile

E: jonatan.israel@pwc.com

more across site & shared bottom lb ros

More from across our site

Wim Wuyts, who had been head of the specialist tax network since 2017, is moving on to a new role with WTS’s Belgian member firm
MNEs are increasingly using algorithmic tools in TP. Sahasranshu Dash argues that data ethics should therefore plug directly into the TP design process
The Institute of Chartered Accountants in England and Wales also queried whether HMRC resources could be better spent scrutinising larger entities
Grant Thornton’s Austria tax head likens his practice to an escape room, shares his football coaching ambitions, and explains why tax is cool
Awards
ITR is delighted to reveal all the shortlisted nominees for the 2025 EMEA Tax Awards
Awards
ITR is delighted to reveal all the shortlisted nominees for the 2025 Asia-Pacific Tax Awards
The fates of pillars one and two hang in the balance after the US successfully threw its weight around in G7 and Canadian negotiations
Rafael Tena tells ITR about the ‘crazy’ Mexican market, ditching the hourly rate, and refusing to grow his fledgling firm in an ‘unstructured way’
It should be easy for advisers to be transparent about costs, Brown Rudnick partner Matthew Sharp said in response to exclusive ITR in-house data
The sprawling legislation phases out Joe Biden-era green tax incentives for businesses; in other news, the UK will reportedly maintain its DST despite US pressure
Gift this article