Global

Details

  • Service: Tax, International Corporate Tax, Global Indirect Tax, Global Compliance Management Services
  • Type: Regulatory update
  • Date: 10/16/2012

Chile - Corporate income tax rate increase  

October 16: Taxpayers with activities or investments in Chile will likely be affected by significant changes to the country's tax regime that were enacted in late September 2012.

The new legislation:


  • Increases the corporate income tax rate to 20%
  • Deems loans to shareholders as disguised distributions that are subject to a 35% tax
  • Changes the treatment of “upstream” loans from a Chilean corporate taxpayer to a related-party affiliate located outside of Chile
  • Modifies the capital gains tax rules relating to transfers of Chilean Limitada interests
  • Subjects indirect transfers of Chilean shares to capital gains tax
  • Introduces OECD-based transfer pricing rules
  • Allows for amortization of goodwill on reorganizations and mergers
  • Taxes foreign taxpayers with a branch or permanent establishment (PE) in Chile
  • Changes the rules for foreign tax credits
  • Changes the withholding tax rules
  • Reduces the stamp tax rate
  • Makes a tax exemption available for certain "standard" software
  • Revises individual income tax rates
  • Introduces an individual income tax credit for education expenses and tuition

Read this October 2012 report prepared by the KPMG member firm in Canada: Chile Hikes Corporate Income Tax Rate


See also TaxNewsFlash-Americas: Chile - Tax reform is enacted; changes for corporate taxpayers




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