Offshore software licenses in Chile exempt from income tax, VAT applies.
The Chilean Tax Administration (SII) has clarified the tax treatment of software licensing services provided from abroad. According to Ruling No. 2066-2025 on 16 October 2025, such services are exempt from non-resident income tax but are subject to general VAT rules.
The ruling addresses the case of an Australian company providing software licenses for use in Chile. A recent change in billing now involves a Chilean intermediary for collections. As a result, Chilean clients, acting as customs agents, are responsible for declaring and paying the VAT.
The SII confirmed that payments for standard, temporary software licenses are exempt from the Additional Tax under Article 59 of the Income Tax Law (LIR). However, VAT applies, and Chilean clients must issue a purchase invoice and remit the tax directly to the authorities. The VAT paid can also be claimed as a fiscal credit.
Additionally, expenses related to the use of the software are deductible from the First Category Tax base, provided they meet the general requirements under Chilean tax law.
