• Service: Tax, Global Mobility Services, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 8/14/2014

Chile - Tax bill amendments propose new corporate tax system 

August 14:  The Chilean government released official text of a bill to modify the proposals in the original tax reform legislation (as initially submitted to Congress in April 2014).


The package of tax reform measures presented to Congress in April 2014 would overhaul the Chilean tax system—including the repeal a mechanism that allows for the deferral of taxation on reinvested profits of foreign shareholders (known as “FUT”).

Read a status update on the tax reform legislation from May 2014: TaxNewsFlash-Americas.

Pursuant to an agreement reached in July 2014 between the Senate and the government, it was agreed to make 278 modifications to the tax reform bill that was submitted in April 2014.

Overview of modifications

The modifications to the tax reform bill would:

  • Establish a new corporate income tax system under which taxpayers could elect between a system of attributed profits or apply a partially integrated system
  • Increase the rate of corporate income tax:
  • From 20% to 25% (to be phased in over the years until 2017) for taxpayers electing the attributed profit system
  • From 20% to 27% (to be phased in over the years until 2018) for taxpayers electing the partially integrated system
  • Apply thin capitalization rules based on a 3:1 debt:equity ratio
  • Limit interest expense deductions on acquistions of shares and other securities
  • Revise the treatment of goodwill for amortization purposes
  • Require information reporting of investments in Chile and abroad by corporate taxpayers
  • Revise the treatment of sales or tranfers of real estate by individuals
  • Provide an alternative for historical FUT and excess withdrawals
  • Make available a cash repatriation regime for one year (2015)
  • Revise the tax credit system for taxes paid to a foreign country under the CFC rules
  • Provide general anti-avoidance rules

    • Read an August 2014 report [PDF 80 KB] prepared by the KPMG member firm in Chile: Tax Alert (August 2014)

    ©2014 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved.

    The KPMG logo and name are trademarks of KPMG International.

    KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever.

    The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

    Direct comments, including requests for subscriptions, to
    For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at:

    + 1 202 533 4366

    1801 K Street NW
    Washington, DC 20006.


    Share this

    Share this


    Subscribe to receive the latest TaxNewsFlash email alerts (you must select the option for TaxNewsFlash)

    Already a Subscriber? Login

    Not a member? Subscribe now