Chile tax authority enables VAT registration for offshore gambling operators

Chile's tax authority has created a mechanism allowing foreign online betting and gaming platforms to register and pay VAT on services provided to local users.

The resolution comes despite Supreme Court rulings that have deemed such operations illegal and ordered the blocking of their websites.

The Servicio de Impuestos Internos (SII) argued that the resolution is intended to improve tax collection rather than address the legality of online gambling. The agency said the measure seeks to ensure that digital services provided from abroad are subject to the same VAT treatment as other activities in Chile. Under the new framework, VAT applies to the full amount paid by users for the service.

Chile's licensed gaming sector criticized the measure. Cecilia Valdés, President of the Asociación Chilena de Casinos y Juegos, said: "This measure does not constitute a simple act of tax collection. In practice, it operates as a mechanism of covert regularization, by incorporating into the state system operators who today carry out an activity that the Supreme Court has classified as illegal." 

The association also pointed out the internal contradiction: one arm of the state is ordering Subtel to block these sites while another is now inviting them to register and pay taxes.

Senators Gastón Saavedra, Ricardo Celis and Diego Ibáñez, all members of the Senate's Economy Commission, announced they would refer the resolution to the Contraloría General de la República for a ruling on its legality, arguing the SII exceeded its administrative authority and effectively advanced online gambling regulation through an executive resolution while Parliament is still debating the issue. 

Deputy Jaime Araya filed a separate referral to the Contraloría and sent a formal inquiry to the Finance Ministry. He said: "The SII is legalizing, through a resolution, an activity that is completely illegal."

Finance Minister Jorge Quiroz defended the measure, drawing a line between tax collection and legal authorization, a position the government has maintained consistently. The Kast administration also recently fast-tracked the online gambling bill in Congress, assigning it an urgent status in early May.

The bill has been in the legislature since 2022. Until it passes, the SII's resolution leaves Chile with a regulatory picture where the judiciary orders platforms blocked while the tax authority opens a formal channel for those same platforms to pay into the fiscal system.