As is often the case, the reality and development of technological advances is faster than the legislation, particularly tax law.
The digitalisation of the economy has been a key focus of tax debates in recent years. Political debates have focused on the differences between taxing physical business operations and virtual operations.
A tax reform was discussed and approved in Chile in 2020, which was published through Law 21,210 on tax modernisation. In the middle of the tax reform discussion, the idea of an indirect and single tax was raised, which finally resulted in a VAT that is applicable to certain digital services.
Foreign digital service suppliers that provide services to Chile must apply, collect and remit 19% VAT on certain digital services (since June 1 2020).
Source Proquest
