Chile Clarifies VAT and Income Tax Rules for Foreign Service Providers Under Tax Treaties

Chile’s tax authority clarified the VAT and income tax treatment for services provided in Chile by foreign companies.
Services are generally subject to VAT unless they are subject to Additional Tax (withholding tax) and not exempt under a tax treaty, preventing double taxation.
Under the Chile-Spain tax treaty, Spanish companies are taxed in Spain unless they have a permanent establishment in Chile; otherwise, their services are subject to Chilean VAT.
The Chilean recipient of the service must pay the VAT and can claim an input VAT credit.
The ruling emphasizes the need for foreign companies and local recipients to understand both domestic VAT rules and international tax treaties to ensure compliance.

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.