Starting next June 1st, foreign companies that provide digital services will start paying 19% Value Added Tax (VAT) in Chile. The measure impacts on foreign digital platforms that provide digital services in the country. Some of the affected OTTs will be Netflix, Amazon and others.

The aim of the measure is that companies that are not established in Chile operate under the same conditions as those that do, which already pay this type of taxes in the country. According to Chilean President, Sebastian Piñera, the tax reform, which had already been treated in the country, will focus on several issues, such as ‘promoting growth, investment and employment, give legal certainty and simplicity to the tax system, in addition to benefiting the most delayed sectors and also ask for an effort and an additional contribution to the most favored sectors’.

The tax reform, promulgated this week, makes Chile join the list of Latin American countries that collect taxes on foreign digital platforms, or intend to do so, as is the case in Mexico, Peru, Colombia and others.