The Chilean Financial Market Commission (CMF) asked the Tax Authority to clarify how payments for remotely provided training services supplied by a provider resident in the Netherlands should be taxed under the Chile–Netherlands Double Taxation Treaty (DTT). Accordingly, the Tax Authority published an official letter addressing this issue.

Tax Implications of the DTT 

The Tax Authority notes that Chile generally applies a 35% additional tax to remuneration paid for services performed abroad. However, the Chile–Netherlands DTT may limit or eliminate this taxation depending on how the training services are characterized under the treaty. In particular, the payment would generally need to be examined under the DTT provisions governing business profits and other types of income to determine whether Chile has taxing rights.

For the DTT to apply, the Dutch provider must demonstrate that it is resident in the Netherlands. The relevant documentation proving tax residency must be available, and the DTT’s requirements concerning the beneficial owner of the income must also be satisfied.

Notably, the VAT treatment is a separate issue from the income tax analysis. The fact that the training is supplied remotely from the Netherlands does not, by itself, determine whether Chilean VAT applies. Instead, the nature of the service and the applicable Chilean VAT rules must be considered separately. 

For VAT purposes, remotely provided training courses supplied by a person or entity without domicile or residence in Chile are exempt from Chilean VAT, provided the activity qualifies as teaching. This means the service must genuinely consist of imparting knowledge or techniques in a particular discipline.

Conclusion

The tax treatment for remote training services from the Netherlands requires a dual-track assessment. While income tax liabilities may be mitigated under the Chile–Netherlands DTT, this is contingent upon verifying tax residency and beneficial ownership. Concurrently, VAT status must be evaluated independently. Remote training activities are generally VAT-exempt if they strictly qualify as the impartation of knowledge or techniques, highlighting the importance of precise service classification for tax compliance.