Foreign tax credits system
  1. New regulation standardizes the treatment of foreign tax credits.
  2. Extends the types of income which grant credit:
    • Dividend and profit distributions;
    • Income for the use of intangibles;
    • Professional or technical services and export services;
    • Income derived from dependent or independent labor;
    • Income attributed to PE located abroad;
    • Passive income obtained by controlled foreign companies, and
    • Income derived from tax treaty jurisdictions with which Chile undertook to grant a foreign tax credit.
  3. The possibility of using the WHT paid in Chile by a foreign subsidiary of a Chilean company is established.
Passive income obtained by controlled foreign companies

Certain income derived from research and development projects are excluded from the passive income definition, subject to approval by the Production Development Corporation (CORFO).