The Amazon app (illustration). - Rafael Henrique / SOPA Images / Si

Digital giants, such as Netflix, Amazon, Spotify or Airbnb, will be subject to a tax of 19% from June 1 in Chile, according to a provision of the tax reform promulgated Tuesday by President Sebastian Piñera. This value added tax (IVA) will affect all digital businesses that do not pay their taxes in Chile because they are not permanently established in the country. They will thus find themselves on an equal footing with local businesses.

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One of the ways to confirm the activity of these companies in Chile will be to verify the address of credit cards or bank accounts used by customers for the services provided. Transport platforms such as Uber or Cabify will however be exempt from this tax. A bill, currently being debated in Parliament, provides that they are required to register in the country and pay their taxes there.

The tax reform presented by the government of conservative president Piñera was initially intended to reverse provisions made by the former socialist president Michelle Bachelet (2006-2010, 2014-2018) who had increased corporate taxes. The government wanted to suppress this increase, but the outbreak of the social crisis in the fall of 2019 forced it to back down. The reform thus provides for an increase in taxes for the wealthiest and a reduction in particular for pensioners and SMEs.

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