Online gambling platforms: Four keys to understand why they were excluded from paying VAT in Chile

What happened

Last March, the Chilean Internal Revenue Service (SII) issued a resolution that excludes online gambling platforms from paying Digital VAT.

This fact surprised the market, since in 2021 the same institution had expressly instructed online casinos to pay this tax through the simplified taxation regime, which is occupied by several platforms without residence in the country, such as Uber or Airbnb, among many others.

This, because the SII requests payment of Digital VAT to those services of supply or delivery of digital entertainment content, provided in Chile by companies without domicile in the country.

Arguments used by the SII

On this occasion, the tax collection agency pointed out that this change of criteria had been made in response to the recommendation of the Superintendence of Gaming Casinos, which argues that online gaming in Chile is illegal.  

To date, several companies were registered to pay the Digital VAT in the mentioned market, being the Latin American Latamwin one of the first companies in its field to register in the simplified taxation registry.

What did the platforms say?

As soon as the news was released, the lawyer representing the Bettson, Coolbet, Betano, Latamwin and Estelarbet platforms - Carlos Baeza - told the press that "'we are a legal activity that needs regulation. Not paying VAT does not generate a problem for us, but it is a problem for the Treasury".

The vision of Baeza, who is part of the prestigious International Master of Gaming Laws (IMGL) network, fits with the legal report developed by the lawyer Javier Couso, who, when analyzing the legality of online gambling, points out: "...there is no provision in the Chilean legal system that prevents the development of online gambling..." However, the professionals agree, it is an activity that needs regulation.

Why should Users be interested?

Because the simplified taxation regime is intended to increase tax collection in Chile, money that is used to finance advances and projects that impact various areas of society.

In parallel, Congress is currently discussing a bill introduced in 2021 that will regulate online gambling platforms. As the discussion progresses, users will have greater guarantees when using these sites.

"The online gambling industry is one of the most regulated in the world. The companies with a track record, including Latamwin, comply with a series of certifications and standards that allow them to deliver a responsible, entertaining and safe gaming experience", assures Carlos Baeza.