Chile Tax Agency Clarifies VAT Credit Eligibility for Vehicles Imported Under Disability Tax Benefit

The Chilean Internal Revenue Service April 23 issued Letter No. 896, clarifying VAT credit eligibility for vehicles imported under the disability tax benefit. The taxpayer, a service provider engaged in engineering services and leasing industrial property patents, sought clarification on whether VAT paid on a vehicle acquired under the disability import benefit could be used as a tax credit. The Tax Agency clarified that: 1) automobiles, station wagons, and similar vehicles generally don’t qualify for VAT credit, even if used in taxable activities, unless the taxpayer obtains authorization under the Income Tax Law; and 2) vans with a gross vehicle ...