Chile Tax Agency Clarifies VAT, Income Tax Treatment of Services Provided by Nonresident Entity

The Chilean Internal Revenue Service Dec. 18, 2025 issued Letter No. 2627, clarifying VAT obligations for services provided by a nonresident entity. The taxpayer, a Spanish company, inquired about the application of VAT to software installation services in Chilean wind farms and the process for refunding overpaid tax. The Tax Agency clarified that: 1) services supplied by nonresident entities and utilized in Chile are generally subject to VAT; 2) VAT isn’t due if an exemption applies because the services are subject to the additional tax under Article 59 of the Income Tax Law; and 3) if the exemption doesn’t apply, ...