The Ruling clarifies VAT treatment and invoicing requirements for outsourced services.
Chile’s tax administration (SII) published Ruling No. 1394-2025 on its website on 24 July 2025, in which it provided clarification of value added tax (VAT) treatment and invoicing requirements for outsourced services.
Ruling No. 1394-2025 clarifies that outsourced services are subject to VAT, requiring service providers to issue an invoice and charge VAT. However, expense reimbursements are not subject to VAT, so no VAT or VAT-exempt invoice is needed.
Additionally, contracting entities can deduct the payments made for outsourced services as income tax expenses.
