Frequently asked questions about Chile VAT

What is VAT?

VAT is the abbreviation of Value Added Tax. VAT is in general due when goods and/or services are sold. It applies to most goods and services that are bought and sold for use or consumption in Chile. It is a consumption tax because it is ultimately borne by the final consumer.

Who must pay VAT?

Generally, VAT is invoiced by the supplier that is selling goods or services and collected from the customer. Subsequently, the supplier reports and remits the collected VAT to the tax authorities.

Where electronically supplied services (ESS) are provided by a supplier that is non-resident in Chile (as is the case for Zoom) the responsibility to collect and remit VAT depends on whether the customer carries out activities that are subject to VAT in Chile.

If the customer does not carry out activities that are subject to VAT in Chile (i.e. individuals and legal entities that are not subject to VAT on their activities), VAT shall be collected on the supplies made to the customer by Zoom. If the customer carries out activities that are subject to VAT in Chile (this could be both individuals and legal entities), VAT shall be self- assessed, under the reverse charge mechanism, by the customer.

Why am I being charged VAT?

Under Chilean VAT rules, Zoom is required to collect and remit Chilean VAT on services provided to customers who do not carry out activities that are subject to VAT in Chile.

Customers who carry out activities that are subject to VAT in Chile may need to self-assess VAT on the services purchased from Zoom.

What is a TAX ID Number?

A TAX ID Number is a unique 9-digit number XX.XXX.XXX-X) that identifies a person or entity as being registered for VAT and other tax purposes in Chile.

How do I enter my Tax ID Number?

If you are registered for VAT and you want to provide your Tax ID Number, follow the steps below depending on where your billing portal is located in the left navigation menu of the Zoom web portal. Not sure how to identify where your billing portal is located? Learn how to locate your billing settings.

Zoom utilizes a real-time validation against the tax authority database to confirm that the Tax ID Number provided is registered as a taxpayer with activities that are subject to VAT. You are required to notify us if there is a change to your VAT status.

Further, Zoom performs periodic validation checks of customer Tax ID Numbers to ensure that the Tax ID Number remains valid and indicates that a customer undertakes activities subject to VAT in Chile. If, during these periodic validations, it is identified that your Tax ID Number is no longer valid or no longer indicates that you carry out activities subject to VAT in Chile, Zoom may automatically update your account so that future invoices are subject to VAT. Where this happens, VAT will be charged on all future invoices until such time that a valid Tax ID Number indicating that you carry out activities subject to VAT in Chile is provided.

What happens if I do not have a Tax ID Number?

If a customer in Chile is unable to supply a valid Tax ID Number which indicates that they carry out activities in Chile that are subject to VAT, Zoom will charge and collect Chilean VAT on its supplies to you.

How does Zoom determine which customers Chilean VAT applies to?

Zoom will treat any customers with a ‘Sold To’-address in Chile as being resident in Chile This information is subject to cross-referencing against other data to verify that the ‘Sold To’ country is accurate.

It is your responsibility as a customer to ensure that your ‘Sold To’-address is accurate.

Is there any threshold for VAT on electronically supplied services (ESS)?

No, VAT applies to all sales of Zoom’s services in Chile where the customer does not carry out activities that are subject to VAT in Chile.

Are there any special exemptions applicable for charities under which VAT may not be charged?

No. VAT will be charged on all supplies made to charities unless the customer provides a Tax ID Number and this Tax ID Number indicates that their activities are subject to VAT in Chile.

Does Zoom provide VAT exempt or services that are not subject to VAT?

Customers who provide evidence that they carry out activities that are subject to VAT in Chile will not be charged VAT by Zoom. There are currently no other exemptions available.

Customers who carry out activities that are subject to VAT in Chile may be required to self-assess VAT on the services purchased from Zoom.

Are there any VAT obligations for me as a customer?

Customers who carry out activities that are subject to VAT in Chile may need to self-assess VAT on the services purchased from Zoom.

If you provide a valid Tax ID number that indicates that you carry out activities that are subject to VAT in Chile, no VAT will be charged to you.

You are required to notify Zoom if there is a change in your VAT status.

What if I carry out activities subject to VAT in Chile and I forget to provide a Chilean Tax ID number?

The Tax ID number may be updated at any time in Zoom's billing portal. If you provide a valid Tax ID number before the next invoice is issued and the Tax ID number indicates that you carry out activities subject to VAT in Chile, Zoom will not charge VAT on future invoices. However, you may be required to self-assess, declare and pay the tax on your Chilean VAT return.

Where VAT has been charged on previous invoices as a valid Chilean TAX ID number was not provided, under the current Chilean VAT rules, it is not possible for Zoom to refund the VAT charged. This is on the basis that VAT was correctly charged at the time of supply. In this case, you should contact The Chilean Internal Revenue Services (“SII”) in order to request the relevant authorization as you may be able to use as a credit the VAT charged.

Decision tree – will I be charged Chilean VAT?

Disclaimer

Every customer is unique and so are their specific tax circumstances. The above-stated information should not be considered as tax advice, but as a general overview of relevant tax rules. Zoom cannot provide you with tax advice for your individual situation, and therefore we strongly recommend speaking with a professional tax advisor for tailored advice.