Exporting services from Chile: the IVA exemption, Customs qualification and SII invoices

A Santiago engineering consultancy designs mining equipment layouts for a client in Toronto. Its first invoices went out with IVA, because nobody had applied to have the service qualified as an export. The Canadian client queried the 19 percent and refused to pay it. The consultancy then learned the step it had missed.

Exports of services need qualification

Chile's IVA law allows services provided in Chile and used abroad to be treated as exports, exempt from IVA. The condition is that the National Customs Service (Servicio Nacional de Aduanas) qualifies the service as an export.

Customs publishes a list of services that are generally eligible, such as engineering, software development, consulting, design and many professional services, and assesses applications against the rules. Once a service is qualified, the exporter invoices it without IVA.

How to apply

1. Describe the service, the foreign client and how the service is used abroad.
2. Apply to Customs for qualification, with the contract and supporting information.
3. Once qualified, issue export invoices for that service.

Do this before the first invoice to a new type of service or client, not after.

The export invoice

Exports of services are invoiced with the electronic export invoice (factura de exportación electrónica, document type 110) through the SII's electronic invoicing system. It identifies the foreign client and can be in foreign currency.

Recovering IVA on inputs

Exporters can request recovery of IVA paid on purchases and services used for their export activity, under SII procedures. For consultancies with significant inputs, such as software, equipment and subcontractors, this is worth claiming.

Getting paid

A Toronto client paying a Chilean bank sends an international wire. US and Canadian clients pay faster and in full when they can use domestic rails: ACH to US account details, or Canadian details for a Canadian client. Chilean companies can hold foreign currency and convert to pesos when they choose; check Banco Central de Chile reporting rules for operations above thresholds.

Paying into Chile: the local rail

Source: CCA Chile. Checked when this guide was last updated; the scheme's own page has the current figures.

Where Rivet fits

A Rivet business account accepts registered companies after verification, including Chilean companies. Approved companies get US account details in their own name on every plan, euro and sterling details from the Growth plan, and on the Scale plan Canadian dollar details and balances in 30 currencies. Payments are matched to invoices and conversions happen at a rate shown before you confirm. Rivet is not a bank; regulated partner institutions hold the funds.