As of June 1, 2020, Chile requires non-resident entities like Twilio Inc. dba SendGrid & its affiliates (hereinafter, “Twilio SendGrid”) to collect Value Added Tax (VAT) for any Electronically Supplied Services (“ESS”) sold to non-registered VAT customers located in Chile. This guide covers how Twilio charges VAT and what services are taxable.
The following topics are discussed in this guide. Click a topic to skip directly to this information:
- Value Added Tax (VAT) overview.
- When will Twilio start charging VAT in Chile?
- How can I be tax exempt for VAT?
- I am a business, but do not have a VAT number. I am not required to register for VAT since my business falls under the required sales threshold for registering
- How do I enter my VAT number?
- How is VAT determined?
- What rate is VAT charged in Chile?
- I forgot to enter my VAT number. Can I get a refund?
- Where can I see the VAT charged on my Invoice?
Value Added Tax (VAT) overview
Chile Tax Authority (Servicio de Impuestos Internos SII) passed legislation effective June 1, 2020, requiring non-resident entities selling digital services to collect and remit a 19% Value Added Tax (VAT) on its sales to non-registered VAT customers located in Chile. Non-residents are only required to apply VAT on Business to Customer (B2C) transactions. Business to Business (B2B) transactions will not be charged VAT if a valid VAT number is provided by the B2B customer.
When will Twilio SendGrid start charging VAT in Chile?
Twilio SendGrid will begin collecting VAT on services sold to customers located in Chile starting in mid January 2025.
How can I be tax exempt for VAT?
B2B customers with a valid VAT number will not be taxed on our end. However, B2B customers are still responsible for the VAT and should self-assess the VAT through the reverse charge mechanism on their Chile VAT return.
I am a business, but do not have a VAT number. I am not required to register for VAT since my business falls under the required sales threshold for registering.
The VAT laws for nonresidents are designed to capture VAT from B2C consumers and from B2B consumers that fall under the sales threshold. Unless a B2B customer can provide a valid VAT number, they will be considered a B2C and the transaction will be subject to tax. Non-residents are not required to tax B2B customers with valid VAT numbers since B2B customers are supposed to self-assess the VAT on their end.
How do I enter my VAT number?
B2B customers can enter their tax ID number in the “VAT Number” field in the Account Details Page.
In Chile, it is a 9-character identifier, consisting of an 8-digit serial number and a 1-digit verification character (number 0-9 or the letter K).
Unless your business details are provided, the tax invoice will not be fully compliant and you may not be able to deduct the VAT imposed.
How is VAT determined?
VAT is applicable based on the type of products or services that are purchased. We have determined that most of Twilio Sendgrid’s products & services are subject to VAT.
Please ensure your service address is up to date in the Account Details Page for correct taxation.
What rate is VAT charged in Chile?
Twilio SendGrid's services will be subject to the 19% VAT rate as determined by the Chile Tax Authority (Servicio de Impuestos Internos SII).
I forgot to enter my VAT number. Can I request a refund?
If you are a B2B customer with a valid VAT number in Chile, please contact our Support team for a credit of the VAT amount charged within 90 days of the initial charge. For invoices issued in closed periods, we will credit the VAT charged in the following month’s invoice.
Where can I see the VAT charged on my Invoice?
You can see the VAT amount charged in the Tax Summary section of your invoice. Your invoice will continue to show subscription charges, usage and taxes in the same currency as before.