VAT Withholding Not Applicable to Electronic Invoice Issuers Outside Withholding List, SII Clarifies

The Chilean Tax Administration (Servicio de Impuestos Internos, SII) has clarified that VAT withholding does not apply to taxpayers who issue electronic invoices and are not included in the official list of taxpayers subject to VAT withholding (Nómina de Contribuyentes Sujetos a Retención) established by Resolution Ex. SII No. 42/2018. [sii.cl]

This clarification follows a case where a contractor reported being subject to VAT withholding by construction companies acting as withholding agents, despite not appearing on the withholding list. Under Resolution Ex. SII No. 142/2005, construction companies designated as withholding agents must withhold VAT only when dealing with taxpayers listed as subject to withholding. [sii.cl]

The SII ruled that both parties must be listed in their respective registries for withholding to apply. Therefore, since the contractor issues electronic invoices and is not on the withholding list, no VAT withholding is required. Construction companies must reimburse and correct improper withholdings. The SII also emphasized that voluntary enrollment in withholding lists is not permitted.

The decision is contained in https://www.sii.cl (Spanish only), published on 5 November 2025.

Note: Resolution Ex. SII No. 42/2018 introduced a cambio total de sujeto pasivo mechanism for certain taxpayers with compliance gaps, shifting VAT liability to the purchaser when both parties are listed. See details here. [sii.cl]

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