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May 5, 2021

Bolivia's Congress discusses bill that would impose VAT on digital services provided from abroad

If enacted, the bill would impose a 13% value-added tax on digital services from foreign service providers. Foreign service providers could register with the Bolivian Tax Administration to pay the tax or local banks may withhold the tax from the payments.

The Bolivian Congress has initiated discussions on a bill (Bill of amendments to Act No. 843)that would impose a 13% value-added tax (VAT) on digital services from foreign service providers to Bolivian residents.

The bill would treat any company or person that provides or intermediates digital services (of any kind) from abroad for the use or provision in Bolivia as a taxpayer. The bill would impose a 13% VAT on digital services from foreign service providers, including on:

  • The purchase and sale of goods
  • Downloads
  • The supply of software and data storage
  • Streaming of music, videos, videogames, photos, magazines and data
  • Advertising

The taxable base would be the price paid to the supplier located abroad. The taxable event would occur when a Bolivian resident uses, consumes or pays for the digital service. The foreign service providers must pay the VAT on a bimonthly basis. To pay the VAT, foreign service providers may register with the Bolivian Tax Administration, obtain a tax identification number, and pay the VAT by deposit or electronic transfer in US dollars. Alternatively, for foreign service providers that do not register, local banks would withhold the VAT amount from the payments made by the users of the services, regardless of the means of payment (e.g., credit cards, debit cards, bank transfers and payment processing companies, etc.).

The bill would not require foreign service providers to issue invoices.


The Bolivian tax system is based on the principles of territoriality and source (Articles 1°, 72° and 42° of Act No. 843), meaning any income generated from the transfer, use or lease of assets, intangibles or rights in Bolivia is taxed, regardless of nationality, domicile or residence of the owner or intervening parties, and where the parties entered into the contracts.

The Bolivian Government announced that it expects to collect around USD 15 million annually as a result of the imposition of the VAT on digital services.

Although foreign taxpayers may elect to register with the Bolivian Tax Administration, we believe foreign taxpayers will not be required to incorporate in Bolivia.

The bill does not indicate if there will be additional tax consequences, such as corporate income tax and turnover tax. These aspects will depend on the future regulations, which could allow the application of additional withholdings.


Contact Information
For additional information concerning this Alert, please contact:
EY Bolivia
   • Juan Pablo Vargas (
   • Adrian Bollet Rollano (>)
Latin America Business Center, New York
   • Ana Mingramm (
   • Pablo Wejcman (
   • Enrique Perez Grovas (