The Chilean government will include a special tax on digital platforms of global firms such as Amazon, Netflix and Spotify in an upcoming tax reform that it will send to Congress, Finance Minister Felipe Larraín said on Thursday (21-6-2018).
The head of public finances highlighted the benefits generated by the digital economy driven by multinationals, but stressed that it is the duty of the authorities to ensure that everyone competes on equal terms.
"We want to create a level playing field for everyone. This issue is not only faced by Chile, but by the whole world (…) for this reason, We have decided to include the taxation of the digital economy in our tax modernizationria"Larraín told reporters.
The official said it is not fair that some companies that provide the same service pay taxes and others do not. He emphasized that, without exception, all must pay income tax, value added tax (VAT) and import duties, when there is no free trade agreement with Chile.
Global Companies
"Companies like Uber, Airbnb, Netflix and Spotify In entertainment and all digital commerce such as Amazon and Aliexpress must pay taxes, I am giving some examples, thus contributing to the development of Chile and leveling the playing field with its competitors," said Larraín.
However, he admitted that in the case of these and other companies, tax collection is much more complex when they are not incorporated in Chile.
"We are evaluating indirect alternatives to taxing them (…) such as charging a tax on transactions. Our preliminary estimates indicate that the collection of taxes on the digital economy, including digital commerce, could reach several hundred million dollars," said Larraín.
The announcement comes shortly after Amazon Web Services' vice president visited Chile and said the firm wants to invest in the country in the long term.
Source: Reuters
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