Chile charges 19% VAT on remote services and low-value goods sold to its consumers, and collects it from foreign sellers. Here is what is covered, how the simplified regime works, what Chilean business clients withhold — and where a Paraguayan company stands.
If you sell digital services or low-value goods to people in Chile from abroad, Chile expects 19% VAT on the sale — collected by you, not by your customer. A foreign company without any presence in Chile registers with the SII in a simplified regime, files online and pays in dollars. It is lighter than Chilean VAT for local companies, but it is not optional, and card issuers enforce it.
For services sold to Chilean businesses, the rules are different: the client pays the VAT and may have to withhold income tax on your fee. This guide covers both sides for a company selling from Paraguay or anywhere else.
The digital-services VAT started in June 2020 with a list: streaming and downloads of content, software and cloud services, platforms that connect buyers and sellers, and online advertising. Since 1 November 2024 it covers any service provided remotely to a consumer in Chile — online courses, consulting by video call, design delivered by email.
Since 25 October 2025, the same regime applies to goods worth up to US$500 sold to Chilean consumers and shipped from abroad. Foreign sellers, marketplaces and re-shippers charge VAT at checkout, and the parcel then enters Chile free of import VAT and duty. The old US$41 de minimis exemption is gone. Above US$500, VAT and 6% duty are charged at customs as before.
| What you sell to Chile | Customer | Chilean VAT (19%) | Who pays it |
|---|---|---|---|
| Digital or other remote services | Consumer (B2C) | Yes | You, through the SII’s simplified regime |
| Digital or other remote services | Chilean company (B2B) | Yes | The Chilean client, by reverse charge |
| Goods up to US$500, shipped to a consumer | Consumer | Yes, at the sale | You or the marketplace, through the simplified regime |
| Goods over US$500 | Anyone | Yes, at import | The importer at customs, plus 6% duty |
Law and practice: VAT Law (DL 825), art. 8 letter n) and arts. 35 A–35 L, as amended by Law 21,210 (2020) and Law 21,713 (2024); low-value goods rules in force from 25 October 2025.
The SII presumes the customer is in Chile if two of four indicators point there: a Chilean IP address or geolocation, a card or bank account issued in Chile, a Chilean billing address, or a Chilean SIM card. If you cannot tell, the presumption decides for you.
This matters most for consumer apps and marketplaces with mixed audiences. Collect at least two data points per transaction and keep them: they are your evidence when the SII asks why a sale was not taxed.
On the SII’s Digital VAT portal. No Chilean company or local representative is needed.
A legal representative, a contact person and an email for SII notices.
On the price paid by Chilean consumers. You issue no Chilean invoices.
Monthly, or quarterly if you choose; due by the 20th of the following month.
By international transfer or card, at the rate on the payment date.
Transaction data and the location evidence, for the SII’s review.
The trade-off for simplicity is that you cannot deduct Chilean input VAT. If you have significant Chilean costs, a Chilean company in the ordinary VAT regime may be cheaper.
Law and practice: VAT Law, arts. 35 A–35 L, and the SII’s resolutions on the simplified regime.
The SII publishes a list of foreign providers that have not registered. Chilean card issuers then withhold the VAT on payments to those providers and pay it to the SII directly. Your Chilean customers see no difference; you lose 19% of the price and have no record of the withholding.
The low-value goods rules show how seriously this is enforced. In the first quarter after they started, Chile collected over US$41 million, most of it from the largest marketplaces. Smaller sellers are next.
Law and practice: SII Exempt Resolution 46/2022 (withholding by card issuers); SII collection figures for the first quarter of the regime.
When the customer is a Chilean company, it pays the VAT itself by issuing a purchase invoice (factura de compra) and claims the credit. You charge no VAT and do not register. If the fee is already subject to Chile’s 35% Additional Tax withheld at source, it is exempt from VAT.
The income tax side matters more. Chilean companies withhold Additional Tax on payments to foreign providers, and the rate depends on the type of service — and on the treaty.
| Payment from a Chilean company to a foreign provider | Additional Tax withheld | With the Chile–Paraguay treaty, no Chilean PE |
|---|---|---|
| Services in general | 35% | Usually 0%: business profits taxable only in Paraguay |
| Technical and professional services | 15% (20% if the provider is in a preferential regime) | Usually 0%: the treaty has no technical-services article |
| Software licences (royalties) | 15% | Up to 15% |
| Standard software for the user’s own use | Exempt | Exempt |
| Digital services to consumers | Not applicable | Not applicable |
This is where a Paraguayan company can have an edge. The Chile–Paraguay treaty has no separate article for technical services, so fees for services rendered from Paraguay, with no permanent establishment in Chile, are business profits taxable only in Paraguay. The Chilean client needs your Paraguayan tax-residence certificate and a sworn statement before paying without withholding. This is our reading of the treaty; the SII has not issued a ruling on Paraguay specifically, so confirm it on a large contract.
Law and practice: VAT Law, art. 11 letter e) (reverse charge) and art. 12 letter E Nº7 (exemption); LIR art. 59 (Additional Tax on services and royalties); Chile–Paraguay treaty, arts. 5 and 7.
A Paraguayan company selling services abroad pays IRE on its profit at 10%. Services used abroad are generally treated as exports and not charged Paraguayan IVA, so Chilean VAT and Paraguayan VAT do not stack. Keep the export documentation — the client’s details and proof the service was used abroad — or the DNIT may charge 10% IVA on the fee.
Law and practice: Paraguay, Ley 6380/2019, IRE and IVA chapters (export of services).
Classify your customers
Consumers or companies, by country, with two location data points each.
Register for Digital VAT
If you sell to Chilean consumers, whatever your volume.
Price with VAT in mind
Decide whether 19% comes out of your margin or goes on the price.
Prepare B2B paperwork
Residence certificate and treaty statement for Chilean clients.
Watch the 183 days
Staff working in Chile on one project can create a permanent establishment.
Keep Paraguayan export records
To keep the export treatment at home.
Yes, on digital and other remote services sold to consumers in Chile, and on goods up to US$500 shipped to Chilean consumers. The rate is 19%.
Online, in the SII’s simplified Digital VAT regime. No Chilean company or local representative is needed.
Monthly or, by choice, quarterly, on Form 129, due by the 20th of the following month. Payment can be in US dollars, euros or pesos.
The SII lists it, and Chilean card issuers withhold 19% VAT from card payments to it.
Yes, but the Chilean company pays it by reverse charge. The foreign provider does not register.
Generally 35%, or 15% for technical and professional services; treaties can reduce or remove it.
Usually yes, for services rendered from Paraguay with no permanent establishment in Chile, under the Chile–Paraguay treaty. The client needs a residence certificate; confirm large contracts with a ruling.
Yes. Since 25 October 2025, goods up to US$500 bear 19% VAT, collected by the seller or the marketplace.
Services from Paraguay and the treaty.
The other law that reaches foreign online sellers.
Tell us what you sell, to whom and from where. We set up Digital VAT, the B2B paperwork and the Paraguayan side — fixed quote within one business day.
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