Chile will review proposal to set the tax on digital platforms at 19%

This article was written and published in Spanish and has been translated into English via Google Translate. Click here to read the original article.

The Government of Chile will review a proposal by businessmen and recommendations of the OECD to set a 19% tax on digital services of companies that operate from outside the country, as part of a project to modernize the tax system.

In the middle of last year, the center-right government announced that it seeks to tax in 10% the services of entertainment platforms such as Netlix and Spotify and the digital commerce of giants like Amazon.

Recently, the Confederation of Production and Commerce and the National Chamber of Commerce asked a legislative panel to consider equating the Tax on Digital Services promoted by the Government with the current percentage of Value Added Tax (VAT).

The request is in addition to recommendations issued by the Organization for Economic Cooperation and Development (OECD) aimed at expanding tax revenue to integrate digital services offered by global companies and billed locally.

The Chilean union says it is necessary to correct a disparity in the tax burden between conventional businesses and the digital economy, where they also operate platforms such as Airbnb, Uber and Aliexpress.

"There is an opinion, for example from the OECD, we consider and evaluate them and then we define them," Finance Minister Nicolás Larraín told reporters.

"We are going to talk with the members of the finance committee and we are willing to talk," he added, referring to a meeting scheduled for next week with the lower house panel.

The Chilean union says it is necessary to correct a disparity in the tax burden between conventional businesses and the digital economy, where they also operate platforms such as Airbnb, Uber and Aliexpress.

The collection is complex in the case of multinationals that are not incorporated in Chile and operate from abroad. The Government said in 2018 that the future tax would be charged through the credit cards of Chilean users.

The measure is part of a broad initiative announced in August by President Sebastián Piñera to optimize the tax system and stimulate investment.

This article was written and published in Spanish and has been translated into English via Google Translate. Click here to read the original article.

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