Chile starts enforcing VAT collection on online betting through payment rails

Chile’s tax authority has moved from rulemaking to enforcement on VAT for online betting platforms operating from abroad. Since 15 July, the Servicio de Impuestos Internos has begun a monitoring mechanism that shifts collection responsibility to banks, card issuers, and other payment providers.

1. On 2 June, the SII published the rules for calculating the VAT that applies to betting, gambling, and casino services supplied from outside Chile. More than a month later, no online betting operator had voluntarily registered in the registry set up for that purpose.
2. That lack of registrations is the trigger for the new enforcement phase. Instead of relying on foreign operators to comply directly, the SII will use bank and non-bank data matching and require the payment method used by the bettor to apply the tax collection mechanism.
3. In practice, banks, card issuers, and other financial entities will have to withhold the 19% VAT on each transaction linked to bets placed on unregistered foreign platforms. The tax authority is moving the obligation to the local financial system, which sits within Chile’s jurisdiction.
4. The SII says the approach builds on experience accumulated since 2021, when Chile began applying VAT to digital services provided from abroad in other categories such as streaming and intermediary platforms. That earlier regime gave the authority tools to identify operators by analysing debit, credit, and prepaid card movements, among other payment instruments.

For payment providers serving high-risk merchants, the important part is not the tax rate itself but the collection point. Chile is making the PSP, issuer, or bank the practical enforcement layer for offshore betting flows, which is exactly where regulatory pressure tends to land when the merchant sits outside reach.