Chile’s tax authority has introduced a new VAT withholding system for non-registered foreign sellers and digital platforms, requiring local financial institutions to collect and remit taxes on their behalf. The rules, effective 1 June 2026, include semiannual reporting obligations and detailed record-keeping, with penalties for non-compliance.
Chile’s tax administration (SII) has published Resolution Ex. SII No. 05-2026 of 14 January 2026 on its website, outlining the tax administration’s VAT withholding system for non-resident sellers and digital platforms that have not registered under the country’s simplified VAT regime.
It establishes a mandatory tax retention system in which local financial institutions, such as banks and card issuers, act as agents to collect taxes from consumers. This measure specifically targets international sellers and platforms that have failed to register for Chile’s simplified tax regime.
SII has established a total change of subject for VAT, designating specific Chilean entities as withholding agents. This applies to:
- Banks and bank support societies.
- Credit and savings cooperatives.
- Non-bank issuers of credit cards, debit cards, prepaid cards (with funds provision), or any payment systems.
These agents are responsible for charging, withholding, declaring, and paying the VAT for remote sales of goods located abroad and destined for Chile made through credit, debit, prepaid cards, or similar payment methods.
The resolution targets remote sales of movable goods located abroad that are purchased by individuals or entities who are not VAT taxpayers in Chile.
Reporting obligations and record keeping
Beyond tax payments, withholding agents are required to maintain a detailed registry. This report must include the merchant’s name, ID, country, transaction dates, and the specific amounts withheld or restored due to disputes.
A seller can be removed from the list if they register for simplified taxation, pay their outstanding debts, or prove that they only sell goods valued at more than USD 500.
Reports must be filed with the SII semiannually: by the last business day of August for the period January to June, and by the last business day of February for July to December. Agents are required to record these withholdings in distinct accounts within their accounting records.
Failure to withhold, declare, or pay the tax, as well as the late or omitted submission of the required reports, will be sanctioned according to the Tax Code.
The resolution enters into force on 1 June 2026.
The first official list for 2026 will be published on 15 June 2026, and will be effective from 1 July through 31 December 2026.
The first mandatory report is due on the last business day of February 2027.
