The Chilean Internal Revenue Service published Circular No. 50 with instructions on the forthcoming entry into force of the modifications introduced by Law No. 21,420, which reduces or eliminates tax exemptions. Among its modifications is the change in the definition of the basic taxable event “service” which is defined as “the action or provision that one person performs for another and for which he receives an interest, premium, commission or any other form of remuneration”. With this change all services provided in Chile are taxed with VAT, even when the beneficiary does not have a domicile or residence in the country.
The modifications will become effective as of January 1, 2023, and, therefore, will apply to the services provided as of that date.