Chile Tax Agency Clarifies VAT on Intermediary Tourism Services

The Chilean Internal Revenue Service June 16 issued Letter No. 1918, clarifying the VAT payable by a Chilean travel company that operates exclusively as an intermediary of receptive tourism services between the service providers and the beneficiaries. The taxpayer sought clarification as to whether VAT should be paid on the company’s gross income, or commissions earned. The tax agency clarified: 1) a taxpayer providing intermediary services on behalf of its principals must issue corresponding invoices to its beneficiaries; 2) the intermediary taxpayer must issue at least one settlement to the principal for the total services provided and the VAT recharged ...