• Service: Tax, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 3/7/2014

Chile - Changes to foreign tax credit rules 

March 7:  Changes to the income tax law in Chile affect the credit claimed for income taxes paid or withheld abroad.

Law No. 20.727 (published in the official gazette on 31 January 2014) modifies Articles 41 A and 41 C of Chile’s income tax law—measures that govern the use of credits claimed against income tax on taxes paid or withheld abroad.

In general, the amount of the taxes paid abroad that can be claimed as a credit for Chilean income tax purposes is increased—i.e., an increase from the current rate of 30% of the amount of net foreign source income, to:

  • 32% relating to income from countries with which there is no income tax treaty
  • 35% relating to income from countries with which there is an income tax treaty

In addition, the type entity for which taxes are paid or withheld abroad and that may generate a credit for foreign taxes is expanded.

Read a February 2014 report [PDF 127 KB] prepared by the KPMG member firm in Chile: Tax & Legal Newsletter

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