Chile: VAT and real estate leases
Guidance for determining whether a real estate lease is subject to value added tax
Guidance for determining whether a real estate lease is subject to value added tax
The tax authority (Servicio de Impuestos Internos—SII) provided guidance for determining whether a real estate lease is subject to value added tax (VAT).
A change made in 2020 to the VAT rules for leased property clarifies that the leasing of property is subject to VAT provided that the subject property is furnished or has facilities that allow for the exercise of a commercial or industrial activity.
The SII guidance provides examples illustrating application of these rules. For instance, one example clarifies that a lease of agricultural property that includes “furniture” for agricultural use or cultivation is not subject to VAT because it is not a commercial or industrial activity. The SII guidance also clarifies that if the lease pertains to property without furniture or facilities, it will not be subject to VAT but that if facilities are subsequently built that by their nature are owned by the lessor, they will become an integral part of the property, and therefore subject to VAT.
Read a June 2021 report (Spanish and English) [PDF 356 KB] prepared by the KPMG member firm in Chile
This report also includes information about other indirect tax developments such as guidance about:
- VAT on the commission from the sale of online courses
- VAT on the lease of modules located within a building
- VAT on the sale of real estate
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