Among other changes, the new Tax Compliance Law incorporates a VAT on products imported through digital platforms and requires the Internal Revenue Service to analyze transfers and deposits that exceed a limit.
It's official. Influencers , digital entrepreneurs and even YouTubers will pay taxes in Chile. This morning, President Gabriel Boric led the ceremony for the publication of the Tax Compliance Law, which seeks to strengthen the powers of the Internal Revenue Service (SII). The ultimate goal is for the agency to more successfully address tax evasion, informality, illegal trade and organized crime.
To be more specific, the new Law incorporates a Value Added Tax (VAT) on products imported through digital platforms. As a result of this measure, the US$ 41 exemption on the purchase of goods imported through digital platforms is eliminated. In addition, a simplified system for the payment of VAT on products up to US$ 500 is incorporated, removing tariffs in this section.
It also requires all companies that interact with Chilean state institutions to begin operations. This implies a change for companies that previously rented electronic payment machines to public bodies on an informal basis.
Even more important is the new role of the banks: they must inform the SII when a client receives a certain number of payments per month or half year. In other words, any transfer or deposit from formal and informal sources will be subject to review by the banks and the SII if it exceeds a limit.
For Carlos San Martín, tax manager at Auditeris, a business outsourcing consultancy, the biggest novelty of the Law is the turning point it represents for digital workers.
“According to the Internal Revenue Service, there is a threshold of at least 4,600 users required to file taxes for being influencers . Last year alone, 68% of these influencers filed taxes and also managed to collect $914 million pesos (US$961,044). So, that is why they want to carry out much greater oversight,” he declared to AméricaEconomía .
On the other hand, San Martín highlights that although some influencers do not sell products or provide services, the fact that they have many followers can turn them into brand promoters, exclusive content and advertising. “Of course, these earnings or exchanges immediately make them participants in an increase in assets and are earnings that obviously must be declared,” he adds.
As an example, Auditeris reported that an influencer who was not regularizing his income earned $380 million pesos (US$399,559) annually. To this we must add the fact that many of these entrepreneurs work on their own or hire only a few people to support them with video editing or the dissemination of content on social networks; therefore, the earnings are even higher.
The Chilean government has praised the measure and assures that the law will allow the collection of 1.5% of GDP, approximately US$ 4.5 billion. Of this sum, it is estimated that US$ 1.2 billion will be allocated to the 2025 Budget to finance public initiatives such as citizen security plans and the Universal Guaranteed Pension (PGU).
WHAT SHOULD ENTREPRENEURS DO?
According to San Martín, although it is advisable for a self-employed person to dedicate themselves 100% to their business to generate higher income, they should know in advance what their tax obligations are. In Chile, many people believe that they only have to declare VAT or income tax in April of next year.
However, it may be the case that a user acquires a license or professional advice for a brand, which requires paying an “additional tax”.
“As an advisor, the first thing we recommend to clients is to carry out a diagnosis of the company, that is, to see if we really comply with all the available taxes. Secondly, we seek to help them with regularisation of these situations and thirdly, to ensure that they can be aware of these tax issues through webinars ,” explains the Auditeris spokesperson.
These problems are common in Chile, because, according to San Martín, the country does not have a widespread tax culture. The analyst believes that the basic and higher education system should include lessons on the importance of recognizing and paying taxes. For example, university courses focused on international business usually address commercial issues, but leave tax issues in the background.
However, if a natural or legal person refuses to cooperate with the tax audit process, the SII has the authority to demand compliance with responsibilities. In these cases, it often happens that the user claims to owe a lower amount of taxes than that stated by the SII, which blocks the audit processes for a considerable time.
However, the Tax Compliance Act introduces new regulations that would speed up these types of problems. Now the Internal Revenue Service can ask a Court of Justice for direct authorization to unilaterally lift the banking secrecy of a user if it suspects that he or she is not complying with the income tax declaration.
“In other words, I wouldn't even be able to find out that I'm undergoing an audit or review process. There won't be any problem with the fundamental rights of privacy, but since the Service has doubts, it will carry out the review and if something strange turns up, the taxpayer will only find out about it,” San Martín explains. Along the same lines, to combat organized crime, the new legal framework establishes the figure of the anonymous whistleblower to facilitate reporting.
