Chile Tax Agency Clarifies VAT, Withholding Tax for Professional Society Receiving Services From Nonresident Providers

The Chilean Internal Revenue Service June 15 issued Letter No. 1729, clarifying VAT payment and withholding tax for a professional society receiving services from suppliers domiciled abroad. The professional society, which is exempt from VAT on its audit and consulting services provided in Chile, sought clarification on the tax treatment of services received in Chile from foreign suppliers. The tax agency clarified that: 1) recipients of services from foreign suppliers are subject to VAT on those services; 2) professional societies subject to first category income tax may issue exempt invoices when they provide services but must submit purchase invoices and ...