Overview

Chile requires Amazon to collect a 19% value added tax (VAT) on selling fees charged to certain sellers. This regulation, which took effect on June 1, 2020, applies to Chile-based sellers who have not provided a valid Chilean VAT ID to Amazon. Understanding how this tax works is essential for sellers operating in or from Chile to avoid unexpected charges on their accounts.

Key Points / What Sellers Need to Know

• 19% VAT rate on seller fees — Amazon charges a standard 19% VAT on referral fees, FBA fees, and monthly subscription fees for affected sellers in Chile.
• Chile-based sellers are impacted — If you reside in Chile or your business is based there, your selling fees are subject to this VAT unless you provide a valid Chilean VAT ID.
• VAT ID exemption available — Sellers who are VAT-registered in Chile can avoid the charge by submitting their 9-digit Chilean VAT ID (formatted as XX.XXX.XXX-X) through Seller Central.
• Non-residents are generally exempt — Sellers who are not residents of Chile will not have Chilean VAT collected on their selling fees.
• Refunds are possible — If you were incorrectly charged VAT, you can request a refund through Seller Central after providing your valid VAT ID.

How Chile VAT Works for Amazon Sellers

Chile's legislation requires non-resident companies that provide remote electronic services to collect VAT when those services are delivered to Chilean residents or individuals not registered for VAT. In the context of Amazon's marketplace, the remote services subject to this tax include listing and referral fees, FBA fulfillment fees, and the monthly professional selling plan subscription. Amazon calculates the VAT at the time an order is placed and collects it from the seller's account when the order ships. This timing distinction is important because it means there can be a delay between when VAT is calculated and when it actually appears as a charge on your account.

How to Submit Your Chilean VAT ID

To avoid being charged the 19% VAT, Chile-based sellers who are VAT-registered must provide their Chilean VAT ID through Seller Central. Navigate to your account settings, find the tax information section, and click on VAT information. From the list of countries, select Chile and enter your 9-digit VAT ID in the required format (XX.XXX.XXX-X). You will need to accept the conditions in the registration agreement to complete the process. Once your VAT ID is on file, Amazon will stop collecting Chilean VAT on your selling fees going forward.