Chile Tax Agency Clarifies VAT Obligations Related to Credit Card Installment Payments

The Chilean Internal Revenue Service Nov. 12 issued Letter No. 2354, clarifying VAT obligations related to credit card installment payments. The taxpayer, a company, used an electronic payment service provider to processes credit card installment payments from customers. The provider forwarded the value of the installments to the taxpayer, applying a variable discount based on the number of installments. The taxpayer inquired as to VAT obligations. The Tax Agency clarified that: 1) there was no sale or service for VAT purposes because the transactions involved transferring ownership of a claim or personal right to a third party without action made ...