Chile: Proposed changes to VAT law, other VAT developments

Recent VAT developments

Recent VAT developments

Legislation presented in late December 2021 would make certain value added tax (VAT) law changes. Among the measures is a proposal to impose VAT on services.

Separately, another legislative measure also concerns VAT with regard to credit notes (with an effective date of 24 March 2022).

Lastly, a case concerns VAT and a franchise and lease contract. In this case, a company entered into a furnished rental agreement and a franchise agreement, for which it will charge a fixed percentage of the tenant's net sales. At the time of signing, the franchisee will pay an amount that represents 5% of the net sales for the next two years and eight months, invoicing in 30 months and paying VAT on a monthly basis. The taxable events in this situation are twofold: (1) the franchise contract, and (2) the lease of furnished real estate. It was established that this tax will accrue at the time of issuance of the tax document and that if these documents are not issued, VAT will accrue at the time the remuneration is received or made available to the service provider. Consequently, both services must be “billed” in the same period in which they are paid, regardless whether they correspond to advances for subsequent periods, and the parties may not mutually agree to different treatment.

Read a January 2022 report (Spanish and English) [PDF 764 KB] prepared by the KPMG member firm in Chile


The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 3712, 1801 K Street NW, Washington, DC 20006.