Chile Targets Offshore Betting VAT Compliance

Chile’s tax authority, the Servicio de Impuestos Internos (SII), is preparing to step up enforcement against offshore online gambling operators after confirming that no companies have registered under the country’s newly introduced Value Added Tax (VAT) framework.

The initiative follows the publication of tax rules earlier this year that apply VAT to online betting, gambling and casino services provided by foreign operators to customers in Chile. The measure forms part of the government’s broader efforts to improve tax compliance within the expanding online gambling market.

According to the SII, the move reflects the increasing visibility of online betting operators through advertising across public spaces, sports organisations and media channels.

No Operators Have Registered

Although the VAT regulations were published on 2 June, the SII stated that no online betting operators had completed registration under the new tax regime.

The authority confirmed that enforcement measures will begin on 15 July against operators that fail to comply with the registration requirement.

Rather than relying solely on voluntary registration, the SII said it will identify offshore operators by analysing banking and other financial information. Where necessary, payment service providers will be required to collect VAT on transactions involving non-compliant operators.

Payment Providers to Collect VAT

Under the new enforcement framework, payment intermediaries will retain 19% VAT from transactions linked to betting operators that have not met their tax obligations.

The SII explained that this approach builds on monitoring systems introduced in 2021 for foreign digital service providers. Those systems enabled authorities to identify overseas businesses operating in Chile through the analysis of payments made using debit cards, credit cards, prepaid cards and other payment methods.

The same process will now be applied to detect offshore gambling operators serving customers in Chile, even if those companies have no physical presence in the country.

VAT Calculation Method Clarified

The tax authority also outlined how VAT will be calculated for betting transactions.

In most cases, the taxable amount will be based on the total value of wagers placed by players located in Chile.

However, where operators can provide evidence of prize payouts, the taxable base may instead be calculated by deducting player winnings from the total value of bets before applying the standard 19% VAT rate.

The clarification provides additional guidance on how foreign online gambling operators will be taxed while reinforcing the government’s intention to apply the same tax principles used for other international digital service providers.

With enforcement scheduled to begin in mid-July, authorities will now assess whether operators comply voluntarily or whether VAT collection will primarily be carried out through payment intermediaries.