Chile VAT Exemption for Charitable Used Goods Sales

May 18, 2026

Updated May 18, 2026

Chile VAT Exemption for Charitable Used Goods Sales

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The Chilean Internal Revenue Service, commonly referred to as SII, released instructions on how and when VAT exemption applies to the sale of used goods carried out by charitable institutions that come exclusively from donations received. The instruction specifies which conditions must be fulfilled for a tax benefit to apply. The purpose of these VAT rules is to support charitable organizations that finance or sustain their activities through the resale of donated items, such as clothing, furniture, appliances, or other second-hand goods.

VAT Rules for Charitable Organizations

As explained by the SII, non-profit entities recognized as charitable institutions are exempt from charging VAT when they sell used tangible movable goods, provided those goods come exclusively from donations they have received. Notably, several conditions must be met simultaneously for this tax benefit to apply.

First, the transaction must legally qualify as a sale under VAT rules. Second, the goods sold must be used, tangible, and movable property. Third, those goods must originate entirely from donations received by the organization. Fourth, the seller must be a non-profit entity recognized as a charitable institution. Lastly, the organization must be registered in advance in a special registry established by Chile’s SII.

Concerning registration, the instruction clearly states that SII is authorized to regulate the registration process through an official resolution. Nonetheless, VAT exemption cannot be applied without organizations' prior registration in this special registry. Consequently, even if all other key conditions are satisfied, an unregistered organization cannot benefit from this measure.

Conclusion

Organizations engaged in charitable work in Chile should further review SII's instructions, as they include a detailed review of each of the conditions set for applying the VAT exemption. Additionally, the SII noted that the exemption became applicable on March 1, 2026, and that it can apply even when the donated goods were received before that date. In other words, the decisive factor is not when the donation was received, but when the sale takes place, provided all defined conditions are met.

Source: Chilean Internal Revenue Service (SII)

Who can apply the VAT exemption for used goods sales in Chile?

The VAT exemption applies to non-profit entities that are officially recognized as charitable institutions in Chile. These organizations must also be registered in a special registry managed by the Chilean Internal Revenue Service (SII).

What types of goods qualify for the VAT exemption?

The exemption only applies to used, tangible, movable goods that come exclusively from donations received by the charitable organization. Examples include donated clothing, furniture, appliances, and other second-hand items.

Is registration with the SII mandatory to receive the VAT exemption?

Yes, prior registration in the special SII registry is mandatory. Even if all other legal conditions are satisfied, organizations that are not registered cannot benefit from the VAT exemption.

When did the VAT exemption for charitable organizations become effective?

According to the SII instructions, the VAT exemption became effective on March 1, 2026. Sales carried out from that date onward may qualify if all requirements are met.

Can donated goods received before March 1, 2026 still qualify for the exemption?

Yes, the SII clarified that the key factor is the date of the sale, not the date when the donation was received. Therefore, goods donated before March 1, 2026 may still qualify if sold afterward under the required conditions.

What conditions must be met for charitable used goods sales to be VAT exempt?

Several conditions must be fulfilled simultaneously. The transaction must qualify as a sale under VAT rules, the goods must be used and movable, they must originate entirely from donations, the seller must be a recognized charitable organization, and the organization must be registered with the SII.

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