VAT is a tax over the value of transactions inside the country corresponding to 19% of its value, that is, the final consumer pays 119% of the value of the good or service.

This tax exists in each of the phases of the production or commercialization process.

In each of these steps, the buying party accumulates a VAT credit (tax credit) and the sales party accumulates a VAT debit (tax debit). Therefore, the final amount to pay in VAT per period corresponds to the subtraction between the VAT debit accounts minus VAT credit.

Transactions subject to VAT

The persons subject to this tax are, in general, all those persons who make sales of goods, those who perform services of some kind, clearly must be transactions not exempt from this tax.

This includes, for example, purchases of materials to build a building, or the sale of any property, regardless of how it is built if by one or two construction companies, also beneficiaries of services when the person who made them is foreign, etc. VAT also applies to public, semi-public, autonomous state institutions, etc.

In general, this tax is referred to sales, services and imports. Any sale of a good or service that is executed in Chile is, in general, subject to VAT. Likewise, it is the case of imports. A final example of subject transactions could be the transfer of tangible resources for the lease of brands, patents, knowledge or other intangible.

VAT exemptions

Exports of goods and services have absolute VAT exemptions. In addition, of the exports themselves, there are also situations in which the transaction qualifies as an exporter and merits an exemption from this tax, such as: international carriers, sale of tourism abroad, some companies and scientific organizations with respect to travel through Antarctica, non-resident companies that operate fish boats or industrial barges, etc.