Chile Tax Agency Clarifies Income Tax, VAT Treatment of Services Provided Remotely From Colombia

The Chilean Internal Revenue Service Oct. 29 issued Letter No. 2220, clarifying the income tax and VAT treatment of services provided remotely from Colombia. The taxpayer, a Chilean resident, contracted for a Colombian resident’s provision of services from Colombia through technological and telematic means. The taxpayer inquired regarding the tax treatment. The Tax Agency clarified that: 1) the services were subject to the DTA’s royalties article, as services provided for technical assistance, technical services, and consultancy services; 2) both countries have taxation rights over payments that Chilean residents make for these services rendered by Colombian residents; 3) Chile, however, can ...