Chile Tax Agency Issues Letter Clarifying VAT Treatment for Renewable Energy Accreditation Charges, Penalties

The Chilean Internal Revenue Service Nov. 12 issued Letter No. 2358, clarifying the VAT treatment for renewable energy accreditation charges and penalties. The taxpayer, a company, operated in the business of marketing electricity. Electric companies must withdraw energy from systems with capacity greater than 200 megawatt (MW) and must prove that 10 percent of their annual withdrawals are offset by injecting non-conventional renewable energy (NCRE). The Tax Agency clarified that: 1) the company must purchase NCRE from generating companies and issue an electronic invoice for this taxable service; and 2) failure to comply with the 10 percent requirement results in ...