Chile Tax Authority fires warning to foreign operators

Conflicts continue to arise as to whether Chile can launch an online gambling regime as regulatory stakeholders dispute legislative boundaries, market rules, and tax policies.

Last week, Chile’s Internal Revenue Service (SII) declared that it had the right to exclude international operators from participating in the market due to ‘Resolution 26‘—a new tax rule co-authored by the Ministry of Finance to exclude non-domiciled businesses from Chile’s ‘simplified tax regime.’

As it stands, non-domiciled businesses are allowed an ‘automatic registration’ in Chile’s simplified VAT tax regime—a system created when VAT on digital services came into effect in 2020—reserved for foreign businesses.

SII has alerted the government that it views all foreign online operators as illegal and in breach of Chile’s tax laws, in which the agency cannot charge “VAT on illicit services that are outside the legal framework.”

The agency’s judgment was declared as Chile’s Online Gambling Bill ‘receives its treatment by the Senate’—a decree drafted and submitted by the Ministry of Finance last summer.

As such, SII expressed its support for the Superintendency of Casinos (SCJ), Chile’s gambling authority, which deems that only the online services of the Concepción Lottery, Polla, and Teletrak are authorized to operate in the country under current regulations.

Responding to developments, Mario Marcel, Chile’s Minister of Finance, acknowledged SII’s verdict, stating that current tax rules must be observed. However, he noted that “the executive is working on new measures to address current conflicts.”

Marcel told local news source Radio AND, “The issue of betting sites has been raised in the legislative discussion. There is a commitment to address this issue as part of the corrective tax reforms being prepared by the government.”

SII’s judgment was criticized by Carlos Baeza, a Chilean lawyer representing the foreign operators of Betano, Betsson, Coolbet, and EstelarBet, who stated that the agency had “given little seriousness” to taxing online gambling activities.

Baeza noted that SII had been presented with a temporary resolution by foreign operators to “pay the digital VAT while the discussion of the bill regulating this industry progresses in Congress.”

“We are concerned that they are preventing us from paying this tax, wasting, without foundation, an income of resources so necessary today to respond to the demands of many Chileans,” he said.