VAT withholding on payment methods in Chile: what changes with the new SII resolution

The tax landscape for cross-border trade in Chile is changing structurally with the implementation of VAT withholding on means of payment .

Through Resolution Ex. SII No. 05, dated January 14, 2026 , the Internal Revenue Service (SII) establishes a Total Subject Change mechanism to ensure the correct collection of the tax on international purchases of goods.

With this measure, the obligation to collect VAT no longer falls on the foreign seller and becomes the direct responsibility of Chilean financial institutions , which will act as withholding agents when processing the payment.

What does VAT withholding on payment methods entail?

The withholding of VAT on means of payment in Chile seeks to reduce the risk of evasion in transactions carried out with foreign sellers or platforms without a local presence.

In practice, the tax is collected directly in the transaction, guaranteeing its collection before the payment is settled to the international supplier.

This change strengthens tax control over:

• Remote sales of goods to Chile

• Foreign digital platforms

• Transactions paid with cards and electronic payment systems

  
  

Who should act as VAT withholding agents?

The resolution requires all entities established in Chile that issue or manage means of payment used in international purchases to withhold VAT, including:

• Banks

• Companies that support banking operations

• Savings and credit cooperatives

• Non-bank issuers

  
  

This also includes issuers of the following means of payment :

• Credit cards

• Debit cards

• Payment cards with pre-funded funds

• Any similar payment system that allows payment to sellers or platforms without a domicile or residence in Chile

  
  

How does the VAT withholding process work?

The operational process defined by the SII for VAT withholding on international purchases is structured in four stages:

1. Supplier verification

When processing the transaction, the bank or issuer must verify if the seller is listed in the official SII payroll .

2. Tax surcharge

If the supplier is listed, the withholding agent must apply the current VAT rate to the value of the transaction.

3. Currency and conversion

• VAT is charged in the same currency as the transaction .

• The amount withheld is declared in Chilean pesos , using the Central Bank exchange rate in effect on the date of the charge.

  
  

4. Declaration and payment

The withheld VAT must be declared and paid monthly using Form 29 .

Key exception: Withholding tax does not apply when the buyer proves to be a VAT taxpayer in Chile .

To whom does the digital VAT withholding apply?

The measure affects foreign sellers and digital platforms that:

• Conduct remote sales of movable goods to Chile

• They do not have a domicile or residence in the country

• They are included in the payroll “Digital VAT Taxpayers Goods Subject to Change of Subject” , because they are not registered in the simplified regime or have not complied with the payment of the tax

  
  

SII payroll: when and where it is published

The list of taxpayers subject to VAT withholding is the instrument that determines when the surcharge should be applied.

• Publication : www.sii.cl

• Frequency : Annual

• Regular date : December 15 (effective from January 1)

  
  

Exceptional publication in 2026

• June 15, 2026 : Publication of the first payroll

• July 1, 2026 : Effective start of withholding

  
  

Tax obligations for banks and issuers

In addition to withholding the tax, financial institutions must comply with additional control requirements:

• Mandatory internal record Prepare the “Digital VAT Withholding Report for Goods” with the details of the transactions.

• Semi-annual submission to the SII. The report must be submitted in August and February .

• Separate accounting records Withholdings must be recorded in separate accounts, allowing traceability and auditing.

  
  

How can a business be removed from the SII payroll?

A foreign seller or platform can request exclusion if it proves:

• Tax formalization , with registration in the simplified regime and full payment of accrued VAT

• Debt regularization , canceling outstanding amounts

• Exclusive sale of goods over USD 500 , subject to customs taxation

• B2B model , with clients in Chile who are solely VAT taxpayers

  
  

Penalties for non-compliance with VAT withholding

Failure to comply with the established obligations may result in significant penalties:

• Failure to withhold or pay VAT: Penalty according to Article 97 No. 11 of the Tax Code , plus adjustments and interest.

• Failure to submit the semi-annual report. Applicable sanctions according to Art. 97 No. 1 .

  
  

Key dates for VAT withholding on payment methods

Milestone	Date
Entry into force of the resolution	June 1, 2026
Publication of the first payroll	June 15, 2026
Start of effective retention	July 1, 2026
First semi-annual report to the SII	Last business day of February 2027

Source: Internal Revenue Service

Brinta and VAT withholding on payment methods in Chile

VAT withholding on payment methods introduces new control, automation and compliance challenges for issuers and companies with international operations.

Brinta allows you to centralize tax rules, automate VAT calculation, and ensure traceability in accordance with SII requirements.

Talk to our team and prepare your operation for VAT withholding in Chile.