When doing business in Chile that involves payment for goods and services, it is important to comply with local invoicing requirements in order to avoid penalties or administrative inconveniences that would be detrimental to your business. The following article highlights some of the key considerations related to invoicing requirements for a foreign company in Chile — one of Latin America’s most highly-developed and prosperous nations, and a popular destination for foreign investment.
Having pioneered economic liberalization policies during the late-1970s and 1980s, Chile emerged as a global leader in promoting free trade, and experienced a period of rapid social and economic development. Today, Chile stands as the top Latin American nation on the 2020 versions of United Nations’ Human Development Index (HDI) and Gender Development Index (GDI).
The country also has one of the highest rates of educational coverage in Latin America, and places significant emphasis on encouraging entrepreneurial culture, with the “Start-Up Chile” accelerator launched in 2010 highlighted as “revolutionary” by Forbes magazine.
Chile had a gross domestic product (GDP) of $294 billion (all figures in USD) in 2019, following 30 years of consistent GDP growth. That same year, the country reached a gross national income (GNI) of $15,010 — a figure that places it as a high-income country by international standards.
Recording positive foreign direct investment (FDI) inflows of $11.4 billion in 2019, Chile has a slew of free-trade agreements (FTAs) in place with key economies in the Americas, Asia, and Europe. The South American country is also a founder member of the Pacific Alliance — a regional economic integration effort that also includes Colombia, Mexico, and Peru, and which has ambitions to expand beyond the region.
While the country faced uncharacteristic social upheaval immediately prior to the global pandemic, that has been calmed by an impending new constitution that will be drawn up in the course of 2021 and promises to address some issues related to the cost of living. Outside of that unrest and a student protest witnessed in 2012, Chile has enjoyed a stable social and political environment, and the country is well known for having the lowest rate of crime in the region.
Whether you are considering doing business or have already established your operations in the country, read on to learn about invoicing requirements for a foreign company in Chile, or go ahead and reach out to us now to discuss your business options.
Invoicing requirements in Chile: when to issue an invoice?
An invoice in Chile describes an agreement for goods or services provided by an individual or firm to a client, and is an important element of record keeping for tax and accounting purposes.
Invoicing requirements for a foreign company in Chile dictate that all companies legally operating in Chile are able to issue an invoice when selling a product or service. Likewise, any organization developing commercial transactions with another organization or service provider must always issue an invoice.
Note that companies in certain sectors that deal with high volumes of overseas clients — such as the tourism sector — have the options of issuing electronic invoices, also known as ‘export invoices’, to clients who do not have a domicile or residence in the country. This process is carried out online and is supervised by the Chilean Internal Revenue Service (SII).
What should an invoice issued to a foreign company contain?
In order to comply with invoicing requirements for a foreign company in Chile, legal entities operating in the country must issue include the following information:
- Economic activity of the issuer and receiver of the invoice, as registered with the SII
- Physical address, telephone number, and email of the issuer
- Identification number of the person/firm who issues the invoice
- Unique Taxpayer Identification Number (RUT) of the issuer and receiver of the invoice. In the event that the issuer is foreign, a default number is assigned
- Invoice number in sequential order
- Invoice issuance date expressed in “day/month/year” format
- Description of the service or good purchased, detailing the quantity per unit
- Price and value of the service or good acquired, indicating the amount of value-added tax (VAT) to be applied
Note that as established by invoicing requirements for a foreign company in Chile, any invoice issued to a foreign person or organization must always VAT. This tax applies to all products sold in the country, regardless of whether the purchase is made in Chile or abroad.
Understand invoicing requirements for a foreign company in Chile with expert support
At Biz Latin Hub, our multilingual team of accounting and taxation specialists is equipped to help you navigate all manner of corporate regulations, including understanding invoicing requirements for a foreign company in Chile. With our full suite of legal, HR, commercial representation, and tax advisory services, we can be your single point of contact to ensure the success of your commercial operations in Chile, as well as any of the other 15 countries across Latin America and the Caribbean where we are present.
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