Chile VAT Guide 2026 — IVA (Impuesto al Valor Agregado)

Overview of IVA

IVA is Chile's principal consumption tax, accounting for approximately 40% of total tax revenue. It was introduced in 1975 at 20%, reduced to 18% in the 1990s, and increased to 19% in 2003 where it has remained since. The tax applies to all stages of the production and distribution chain, with businesses acting as tax collectors — they charge IVA on their sales (output tax) and deduct IVA paid on their purchases (input tax), remitting the net difference to the SII. The ultimate burden falls on the final consumer.

IVA is administered by the Servicio de Impuestos Internos (SII) through the mandatory Facturación Electrónica (electronic invoicing) system. Chile was an early adopter of mandatory e-invoicing, which has significantly improved tax compliance and reduced evasion.

Standard Rate — 19%

• Scope: The standard rate of 19% applies to all taxable supplies of goods and services, including: retail and wholesale sales of goods, professional services (legal, accounting, consulting, IT, engineering), restaurant and hospitality services, telecommunications, electricity, gas, water, construction services, vehicle sales, and most business-to-business and business-to-consumer transactions.
• Domestic supplies: IVA is charged on all taxable supplies made within Chilean territory. The tax is calculated on the transaction value (net of IVA). The VAT-inclusive price is the common way prices are displayed in Chile.
• Imports: All imported goods are subject to IVA at 19% at the time of importation, calculated on the customs value (CIF value plus customs duties). The importer must pay IVA to the Customs service (Aduanas) before the goods are released.

Zero Rate — 0% (Exports)

• Scope: Exports of goods and services from Chile are subject to IVA at 0%. This means no IVA is charged to the foreign customer, but the exporter can still claim a full refund of input IVA incurred on related costs (raw materials, manufacturing, transport, packaging).
• Export documentation: To qualify for the 0% rate, exporters must provide proof of export: customs clearance documents (DUS — Declaración Única de Salida), transport documents, and commercial invoices. The SII may also require supporting documentation for deemed exports (e.g., services provided to non-residents).
• Service exports: Services provided to non-resident clients (consulting, software development, engineering, education) may qualify as exports and be subject to 0% IVA, provided the service is effectively used outside Chile. The SII has specific rules for determining when a service qualifies as an export.
• IVA refund for exporters: Exporters can apply for a refund of input IVA (IVA Crédito Fiscal) through the SII's simplified refund procedure (Solicitud de Devolución de IVA Exportadores). The refund is typically processed within 30–60 days.

Exempt Supplies (Without IVA)

• International transport: International air, sea, and land transport of passengers and cargo is exempt from IVA. This covers tickets for international flights, shipping freight, and cross-border land transport services.
• Insurance: Insurance premiums (life, health, property, transport, liability) are exempt from IVA. Insurance brokers' commissions on exempt insurance are also exempt.
• Financial services: Most financial services are exempt, including: lending (mortgages, personal loans, commercial loans), deposit accounts, currency exchange, securities trading, and investment management. However, explicit fees for financial advisory services may be subject to IVA.
• Education: Educational services provided by licensed institutions (schools, universities, technical institutes) are exempt from IVA. This applies to tuition fees, registration fees, and directly related educational materials.
• Healthcare: Medical and healthcare services provided by licensed professionals and institutions (hospitals, clinics, doctors, dentists) are exempt from IVA.
• Real estate: The sale of existing residential property (not new) is generally exempt from IVA. New construction sales may be subject to IVA under certain conditions. Commercial property leases are subject to IVA.
• Cultural and sporting events: Admission to cultural events (theatre, concerts, museums) and sporting events may be exempt under certain conditions, though this depends on the specific event and organising entity.

Electronic Invoicing — Facturación Electrónica

Chile has one of the world's most advanced mandatory electronic invoicing systems. Since 2018, all businesses must issue electronic invoices (Factura Electrónica — FE) through SII-authorised systems. The key features are:

• Mandatory e-invoicing: All VAT-registered businesses must issue electronic invoices, credit notes, and debit notes. Paper invoices are generally not permitted, except for specific exceptions (small taxpayers in certain areas, or for exports in some cases).
• Real-time SII verification: When an electronic invoice is issued, it is transmitted to the SII in real-time. The SII validates the invoice (taxpayer status, RUT numbers, VAT rate) and assigns a unique Electronic Invoice Number (Folio). The buyer can verify the invoice on the SII portal instantly.
• DTE (Documento Tributario Electrónico): The e-invoicing system covers all tax documents: Factura Electrónica, Boleta Electrónica (receipts for final consumers), Guía de Despacho (delivery notes), Nota de Crédito (credit notes), and Nota de Débito (debit notes).
• Integration with accounting: E-invoicing data is automatically integrated into the SII's tax control systems. The SII can cross-reference invoices between buyers and sellers, detect discrepancies, and audit taxpayers more efficiently.

Monthly VAT Returns

• Filing frequency: VAT returns (Form 29 — F29) must be filed monthly, typically by the 12th day of the following month (e.g., January's VAT return is due by 12 February). The exact deadline depends on the taxpayer's RUT (tax ID number) last digit — the SII publishes a staggered schedule.
• Return content: The F29 return reports total sales (with and without IVA), output IVA (IVA Débito Fiscal), input IVA (IVA Crédito Fiscal), net IVA payable or refundable, and any other specific taxes (Impuesto Adicional, Impuesto de Timbres y Estampillas).
• Net calculation: If output IVA exceeds input IVA, the taxpayer pays the difference to the SII. If input IVA exceeds output IVA (common for exporters or businesses with significant capital investments), the taxpayer may carry forward the credit or apply for a refund under certain conditions.
• Late filing penalties: Late filing of the F29 incurs penalties starting at 10% of the tax due, plus interest (approximately 1.5% per month, calculated as the daily UF interest rate). Repeated late filings may result in higher penalties and SII scrutiny.

Registration and Thresholds

• Mandatory registration: Any person or entity that engages in taxable activities (selling goods or services) in Chile must register for IVA with the SII. There is no minimum turnover threshold for IVA registration — even small businesses must register if they carry out taxable activities. However, small taxpayers may qualify for the simplified regime (Régimen Simplificado) with reduced compliance obligations.
• RUT (Rol Único Tributario): Each taxpayer is assigned a RUT number, which is the central identifier for all tax matters. The RUT is used for invoicing, VAT returns, income tax, and all SII communications.
• Simplified regime for small taxpayers: Small businesses with annual sales below approximately 2,400 UTM may opt for the simplified IVA regime, which allows them to declare IVA on a cash basis (rather than accrual) and offers simplified record-keeping requirements. These taxpayers may also use simplified electronic invoicing (Boleta Electrónica) instead of full Factura Electrónica.
• Foreign businesses: Non-resident businesses that provide digital services (streaming, SaaS, e-books, online courses) to Chilean consumers are required to register for IVA under the Digital Services Tax regime introduced in 2020. Foreign providers can register through a simplified online procedure and file quarterly returns.

Special IVA Regimes

• Agricultural sector: Farmers and agricultural producers may benefit from a reduced IVA rate on certain inputs and a simplified calculation method (IVA Agropecuario Simplificado). This regime allows for a deemed input IVA credit equal to a percentage of their sales, reducing the compliance burden.
• Construction and real estate: Construction services are generally subject to 19% IVA. However, the sale of new residential properties (first sale) may be subject to IVA, while subsequent sales of the same property are exempt. The construction company charges IVA on the sale and can deduct input IVA on construction costs.
• Used goods: Sales of used goods by persons who are not habitual dealers are not subject to IVA. However, businesses that deal in used goods (e.g., used car dealers) must charge IVA on the resale margin.
• Tourism — Hotel accommodation: Hotel and short-stay accommodation services are subject to the standard 19% IVA (unlike some countries that have reduced rates for accommodation). This applies to hotels, hostels, Airbnb, and similar services.

FAQs

Do I need to charge IVA on services to foreign clients?

If the service qualifies as an export (used or consumed outside Chile), it is subject to 0% IVA — meaning you do not charge IVA but can claim input IVA refunds. If the service is used in Chile but paid by a foreign client, it is subject to 19% IVA. The SII has guidelines for determining when a service qualifies as an export — professional services, IT development, and consulting are often eligible if the recipient is outside Chile and the benefit accrues abroad.

What is the difference between Factura Electrónica and Boleta Electrónica?

Factura Electrónica is the full electronic invoice used for B2B transactions, with detailed VAT breakdown, buyer RUT, and line-item details. Boleta Electrónica is a simplified electronic receipt for sales to final consumers (B2C), which does not require the buyer's RUT and has fewer mandatory fields. Both are transmitted to the SII in real-time, but the Boleta does not generate input IVA credits for the buyer.

Can I recover IVA on business expenses?

Yes, provided you have valid electronic invoices (Factura Electrónica) issued in your name and RUT. Input IVA credit is available for purchases directly related to your taxable activity. Certain expenses are specifically excluded from input IVA recovery: entertainment expenses, gifts, personal expenses, and costs related to exempt activities. The SII may disallow input IVA on expenses it considers non-business-related.

What happens if I issue an invoice with incorrect IVA?

If you issue an invoice with incorrect IVA (e.g., applying 19% when the supply is exempt, or vice versa), you must issue a Nota de Crédito (credit note) to cancel the incorrect invoice and issue a new corrected invoice. Both the credit note and new invoice must be transmitted to the SII electronically. Incorrectly charged IVA may result in penalties if the SII identifies systematic errors during an audit.

Is there a VAT on digital services from abroad?

Yes. Since June 2020, foreign providers of digital services (streaming platforms like Netflix, Spotify; SaaS providers; online course platforms; e-books; app stores) must register for Chilean IVA and charge 19% on supplies to Chilean consumers. Foreign providers can register through the SII's simplified foreign registration portal. The tax applies to B2C supplies; B2B supplies are subject to reverse-charge rules.

Disclaimer

This guide provides general information about Chile's VAT (IVA) system as of 2026. Tax rates, rules, thresholds, and procedures are subject to change. The examples provided are illustrative and may not reflect your specific circumstances. Always consult a qualified Chilean tax advisor (contador auditor) or the SII for advice specific to your situation. InvestmentKit does not provide tax advice.