Withholding and filing rules
- Amendments to withholding rules regarding the WHT applicable to dividends and profit distributions abroad. The Corporate Tax credit must be applied according to the provisional Corporate Tax rate that corresponds to assign in the year of the profit distributions or remittance.
- It reduces the period (from 30 to 20 days) that the IRS has to decide on the request for prior determination of the capital gain on which WHT should be calculated for payments or remittances to persons without domicile or residence in Chile. If the IRS does not make a decision within this period, the determination proposed by the taxpayer will be deemed to have been accepted.
Burden of proof rules
- Taxpayers that are not liable to keep accounting records may justify through any proof means that their income or investment derive from exempt income or income subject to substitute taxes.
- Modification of rules for the adjustment of the taxpayer’s accounting records when they do not adequately reflect its effective income due to fortuitous case or force majeure.
- The IRS is prohibited from qualifying the taxpayer’s accounting books as unreliable when the proportion between its net and gross income is within the observed margins for similar taxpayers.
- New requirement to apply the net taxable income presumption in case it may not be clearly and reliably determined. For such presumption to apply, the cause of the latter must be attributable to the taxpayer.
Monthly provisional payments (“PPM”)
Possibility to recalculate the PPM rate within the year, in case the taxpayer experiments relevant changes in its income, costs or expenses that may significantly affect the taxable income of the business year.
Termination of activities regulation
- Accumulated profits are deemed reinvested by the owners proportionally to their rights to profits and not to their equity interests.
- A period of two months is established from the date of the termination of activities notice to make the termination tax payment, determined at the date of the closing balance sheet.
- Once the notice is given, the IRS has a period of 6 months to issue the corresponding tax payment order by any tax differences and certify the termination of activities of the company.
- If the IRS does not make a pronouncement within the aforementioned 6-month period, the taxpayer’s return shall be deemed to have been accepted, subject to certain exceptions.
- “Business group” is defined by reference to the provisions of Article 96 of Law No. 18,045 (“Securities Law”).
- A definition of “related parties” is established, setting out various hypotheses that configure this relationship.