Chile Tax Agency Issues Letter on VAT Treatment of Commercial Leasing of Mall Spaces

The Chilean Internal Revenue Service Dec. 3 issued Letter No. 2509, clarifying the VAT treatment of the commercial leasing of mall spaces. The taxpayer, a commercial lessor, inquired concerning VAT treatment if a tenant leased an empty mall space, and installed furniture and machinery to carry out commercial activity, which it would remove at the end of the lease. The Tax Agency clarified that: 1) the leasing of real estate is generally exempt from VAT, but subject to VAT if it includes facilities or machinery sufficient for commercial or industrial activity; 2) facilities common to all buildings, like parking lots, ...