OTT tax law to take effect from 1 June

2 Mar 2020

Chilean President Sebastian Pinera has signed into law a new tax reform bill that will require overseas companies that provide services in Chile to pay VAT in the country. The bill obliges digital companies such as providers of over-the-top (OTT) services and e-commerce firms to pay a 19% VAT in Chile from 1 June 2020. Local news portal biobiochile.cl writes that the reform is expected to generate an additional USD2.2 billion per year for the government, equivalent to 0.6% of the country’s GDP. The outlet notes that OTT content providers such as Netflix and Spotify are amongst the companies that will be impacted by the new levy, as will online marketplaces Amazon and Airbnb. Transport-based digital services – such as Uber and Cabify, for example – are reportedly exempt from the new law, as the industry is the target of a separate bill currently being discussed in parliament.

Chile, Ministry of Transport and Telecommunications (MTT)