Chile: Tax Reform

Since 2019, there is a new tax reform in place in Chile which affects the following topics:

  • Digital Assets
  • Invoicing and Returns
  • Investmentfonds
  • Donation of Goods
  • Company Divisions

 

Digital Assets

Directive DDJJ No. 1891 introduced a new type of asset that is of a digital nature. Digital assets are not physically available but only exist in a digital format such as pictures, videos, audio files, animations, presentations or even Bitcoin. Taxpayers that own digital assets will now have to submit the new Document No. 1891 which has to be submitted to the tax authorities. The new regulation became effective in 2019 but the document needs to already be submitted for tax year 2018.

 

Invoicing and Returns

In Chile, a business needs to issue an invoice only at the time of delivery. However, it is possible to issue it in advance if the VAT is levied. When returning goods, the client has the right to receive store credit valid for 3 months starting the day of delivery (not invoice!).

 

Investment Fund

The tax reform includes new regulations on which companies have to get the tax number RUT. This tax number is connected to various registration and information duties. The information duties include notification about changes, fusions, divisions, transformations, dissolutions and liquidations of all administered funds.

 

Donation of Goods

If groceries or toiletry articles cannot be sold anymore due to missing or wrong labelling or because they are nearing their expiration date, companies can profit fiscally from donating them. According to Bulletin 60/2018, companies that donate said goods to non-profit institutions can deduct the thus-caused losses. The premise for receiving the tax cut is a confirmation receipt from the recipient. Moreover, the tax cut can be used on top of existing VAT tax credits.

 

Company Divisions

Since 2013, a Chilean regulation prevented divided companies from using their tax credits as well as credits from dividend payouts or profit withdrawals. The new tax reform now allows those companies to profit from said credits proportionally to their shares of the original company.

 

These regulatory changes could affect your business with view to customizing or support of your ERP/SAP system. Please contact us to learn about possible necessary reactions to the changes – we are happy to assist you!

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