Chilean Tax Agency Clarifies VAT Base for Lease-Purchase Agreements on Real Property Transactions

• The Chilean Internal Revenue Service issued guidance on VAT for property leases with purchase options.
• VAT applies to leases with an option to purchase.
• The taxable base includes the value of each lease installment minus profit or interest.
• The land acquisition value can be deducted from each installment, including the purchase option.
• Contracts signed before January 1, 2016, may be exempt from VAT if the prior acquisition was exempt.

Source: news.bloombergtax.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.