Chile planning new ecommerce tax for multinationals: finance minister

FILE PHOTO: Chile's Finance Minister Felipe Larrain speaks during an interview with Reuters at the OECD headquarters in Paris, France, May 31, 2018. REUTERS/Philippe Wojazer

(Reuters) - Chile’s government is planning to include a new tax on multinational digital commerce companies with local operations as part of a wider tax bill set to go to Congress this year, Finance Minister Felipe Larrain said on Thursday.

He did not give specifics but said that the measure may involve a tax on each transaction and would be aimed at international companies such as Amazon AMZN.O, Netflix NFLX.O, Spotify SPOT.N, and Uber [UBER.UL].

Larrain said citizens of the Andean nation had benefited significantly from the roll-out of the digital economy, but that it was only fair that multinationals operating in Chile contribute to the country’s development.

“Obviously innovation and entrepreneurship are welcome. However, it is the government’s duty to ensure that everyone can compete on a level playing field,” he told reporters in the capital Santiago.

E-commerce is gaining traction in Latin America after a slow start. Last month, an Amazon Web Services vice-president met Chilean president Sebastian Pinera to discuss Amazon investing in the country as part of a longer-term regional expansion plan.

Larrain acknowledged other countries had grappled with taxing e-commerce because the companies often lack a physical presence in-country.

“We are looking at other ways to apply tax, perhaps charge a transaction fee,” he said. “Initial estimates suggest that collecting taxes from the digital economy and digital commerce could bring in several hundred million dollars.”

The center-right government is hoping to send the tax bill to Congress in the next three months. Pinera has pledged to partially roll back corporate taxes hiked by his center-left predecessor, Michelle Bachelet.

Reporting by Antonio de la Jara and Aislinn Laing, Editing by Rosalba O’Brien