Online Service Taxation

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fraggle092
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Online Service Taxation

Post by fraggle092 » Fri Jul 05, 2019 10:24 am

It's coming, as part of the tax "reforms" currently being discussed in Congress, they propose slapping a 19% Tax on...everything they can. How they manage to "persuade" foreign platforms to go along with this idea remains to be seen. A wall, like the Chinese one, maybe? That would be easy enough to do, given Chile's limited connections to the rest of the world. They don't appear to be distinguishing between free and paid services either, in effect they seem to want to tax the internet.
...servicios prestados en Chile de cualquier naturaleza, o de ventas realizadas en Chile o en el extranjero siempre que estas últimas den origen a una importación, como por ejemplo Airbnb....

...También serán parte las plataformas que suministran o entregan contenido de entretenimiento digital, tal como videos, música, juegos u otros análogos, a través de descarga, streaming u otra tecnología, incluyendo para estos efectos, textos, revistas, diarios y libros. Dentro de este rubro se encuentran Netflix y Spotify. Las plataformas que ponen a disposición software, almacenamiento, plataformas o infraestructura informática, como Google Drive y Dropbox, también podrían quedar afectos de pagar el impuesto del 19%.

Fuente: Emol.com - https://www.emol.com/noticias/Economia/ ... ecios.html

Its a straight tax they want, not even partially recoverable by businesses (in the way that IVA is) btw.
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admin
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Re: Online Service Taxation

Post by admin » Fri Jul 05, 2019 11:15 am

they are planning to add it to credit card processing, the mechanics of that i am sure will be a mess.

these companies have always been required to pay taxes in chile, but have been evading or ignoring them. chile is finally getting around to fixing this.
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fraggle092
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Re: Online Service Taxation

Post by fraggle092 » Fri Jul 05, 2019 12:42 pm

admin wrote:
Fri Jul 05, 2019 11:15 am
these companies have always been required to pay taxes in chile, but have been evading or ignoring them. chile is finally getting around to fixing this.
Note that internet access itself is already taxed at 19%.
Even your hosting service for allchile.net will be liable.
Faced with no growth, and those social commitments promised by Bachelet, (and sustained by Piñera), the government needs more money.
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admin
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Re: Online Service Taxation

Post by admin » Fri Jul 05, 2019 1:14 pm

fraggle092 wrote:
Fri Jul 05, 2019 12:42 pm
admin wrote:
Fri Jul 05, 2019 11:15 am
these companies have always been required to pay taxes in chile, but have been evading or ignoring them. chile is finally getting around to fixing this.
Note that internet access itself is already taxed at 19%.
Even your hosting service for allchile.net will be liable.
Faced with no growth, and those social commitments promised by Bachelet, (and sustained by Piñera), the government needs more money.
eeeee, no. long story, but our hosting service won't be taxed.
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FrankPintor
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Re: Online Service Taxation

Post by FrankPintor » Fri Jul 05, 2019 5:04 pm

Sounds like Chile is planning an equivalent of Argentina's AFIP?

That way they get to control everything, and yes, it's a disaster. It's impossible to even write an invoice without passing through AFIP's system. The obvious consequence, apart from tying the country in knots, is to cause an enormous black market.

There was a comment in the Argentinian "lights-out" thread about how a cyber attack on the electricity system would take the country down. There's a much more elegant way to do it, just turn off power to AFIP, commercial life would come to an immediate halt, no transactions could be processed, and recovering from that situation would be much more difficult.
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paladin
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Re: Online Service Taxation

Post by paladin » Fri Jul 05, 2019 6:05 pm

I dont know the mechanics of it, but Australia recently started taxing all imports, even the low value ones that were previously not taxed. When I buy say from ebay in the US and have the item shipped to Aussie, ebay charge me the tax and somehow hand it over. I think the same is now happening with Aliexpress.

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fraggle092
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Re: Online Service Taxation

Post by fraggle092 » Fri Jul 05, 2019 8:08 pm

FrankPintor wrote:
Fri Jul 05, 2019 5:04 pm
Sounds like Chile is planning an equivalent of Argentina's AFIP?

That way they get to control everything, and yes, it's a disaster. It's impossible to even write an invoice without passing through AFIP's system. The obvious consequence, apart from tying the country in knots, is to cause an enormous black market.

There was a comment in the Argentinian "lights-out" thread about how a cyber attack on the electricity system would take the country down. There's a much more elegant way to do it, just turn off power to AFIP, commercial life would come to an immediate halt, no transactions could be processed, and recovering from that situation would be much more difficult.
Well, electronic facturación is already here in Chile, no more paper invoices, and the boleta electrónica is expected to feature in the next tax ratchet, (cunningly disguised as a "reform"). If the quality of Chile's government cybersecurity is on a par with the rest of their efforts, it wouldn't be very hard to bring it down.

Btw, the Credit Card monopoly, Transbank, has being sharing consumer transaction info with the tax people since 2010.
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Re: Online Service Taxation

Post by admin » Fri Jul 05, 2019 8:18 pm

FrankPintor wrote:
Fri Jul 05, 2019 5:04 pm
Sounds like Chile is planning an equivalent of Argentina's AFIP?

That way they get to control everything, and yes, it's a disaster. It's impossible to even write an invoice without passing through AFIP's system. The obvious consequence, apart from tying the country in knots, is to cause an enormous black market.

There was a comment in the Argentinian "lights-out" thread about how a cyber attack on the electricity system would take the country down. There's a much more elegant way to do it, just turn off power to AFIP, commercial life would come to an immediate halt, no transactions could be processed, and recovering from that situation would be much more difficult.
well that sounds like they could just fix the economy by flipping a switch. :lol:
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at46
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Re: Online Service Taxation

Post by at46 » Fri Jul 05, 2019 8:28 pm

fraggle092 wrote:
Fri Jul 05, 2019 8:08 pm
Btw, the Credit Card monopoly, Transbank, has being sharing consumer transaction info with the tax people since 2010.
There's all kinds of sharing going on. I bought some medicines at Farmacia Ahumada yesterday using my RUT to get a 10% Cruz Blanca discount and today I got an email from Cigna offering me expat medical insurance.

mem
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Re: Online Service Taxation

Post by mem » Fri Jul 05, 2019 8:49 pm

How would this work for example with Netflix?


Would the onus be on Netflix to charge an additional 19% on top of what they are already charging? Would the onus be on the customer/resident of Chile to input this on their Chilean tax return and pay it retroactively for the tax year?

Or would it be like with Fatca where companies like Netflix just say, Ehh, if you are a tax resident of Chile, we can't offer you service anymore?

Might just push people into serious permanent hw based VPN's solutions.

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fraggle092
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Re: Online Service Taxation

Post by fraggle092 » Fri Jul 05, 2019 10:22 pm

mem wrote:
Fri Jul 05, 2019 8:49 pm
How would this work for example with Netflix?
Nobody knows yet. Its still being debated in Congress. It would have to be done in a way thay makes evasion difficult.

I guess that the government would probably pass the billing issue back to the ISPs and make them assess and collect the tax. That's how IVA is already collected.

As for VPNs, if a Chinese-type solution was in place, they could just block the standard ports. Then they come and ask you what you are using it for....
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Julito
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Re: Online Service Taxation

Post by Julito » Fri Jul 05, 2019 10:55 pm

Transbank is no longer a full monopoly, Sumup, CLP29.000 and you own the machine, no monthly fees and lower commissions. It´s still not as diverse as Transbank. We´re saving money on most credit card transactions but direct debit is only allowed on the cards from the bank where the machine was bought. They´re UK based so I and many many others are hammering them to push harder for full competition against what´s still a Transbank partial monopoly on all direct debit/credit cards, domestic and international.

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