- The term “current market value” is replaced by “normal market value ,” which acquires a legal definition, being understood as the value that would have been agreed upon by unrelated parties in comparable transactions and circumstances.
- Regarding the appraisal process, when applicable, the IRS must summon the taxpayer to provide all the supporting documentation that proves the act was carried out at normal market value. The summon is not required in the case of real estate, where the IRS may exercise its appraisal authority and assess the corresponding tax if the assigned value differs significantly from market values.
- The applicability of Article 64 to international reorganization processes is legally recognized. In particular, regarding mergers, divisions, or other national or international reorganizations, the appraisal authority will not apply as long as the tax basis of the assets is maintained and no effective cash flows are generated for the contributor.
- In the case of international reorganizations other than a merger or division that affect assets, shares, or rights located in the country, the following requirements will be necessary: (i) that there is a legitimate business reason, (ii) that no cash flows are generated for the contributor, (iii) that the tax basis of the assets is maintained, (iv) that the legal requirements of the foreign jurisdiction have been complied with, and (v) that the taxing authority of Chile is maintained or not affected.
- The concept of “legitimate business reason” will have the following legal definition: “that which aims to improve or facilitate business conditions; obtain competitive advantages; financing; eliminate or mitigate costs or risks; increase production capacity or market presence; optimize management; or any other similar purpose that, in any case, is distinct from merely tax-related motives.”
- The IRS’s limitation will not apply in the event that the reorganization involves the transfer of ownership of assets, shares, or rights located in the country to entities domiciled or residing in countries or territories with a preferential tax regime.
In the absence of a special rule, the amendments will come into effect starting from the first day of the month following the publication of the law.
