A new project to reform and modernize the Chilean tax system, and boost investment in the country, was presented by the government of President Sebastián Piñera on August 23, 2018. Through this website, and as with the two previous tax reforms, Carey will offer an analysis of the main proposed changes.
After almost two years of legislative discussion, Law No. 21,210 was published last Monday, February 24, with the objective of modernizing tax legislation. In order to facilitate its understanding, the following is a description of the main reforms incorporated.
- Amendments to the tax system
- Capital gains regulation
- Disproportionate distributions
- Expense deductibility
- Regulations for financial operations
- Taxation on individuals
- New rules for foreign investors
- Foreign investments made by Chilean-residents
- Tax compliance regulations
- Special Programs
- Taxpayers’ rights
- Audits and taxpayers´ defense
- Legal tax claim procedure
- Taxpayer’s protection office
- VAT on digital services
- Taxable event service
- VAT on real estate sales
- VAT tax credit on construction
- VAT on the leasing of furnished or equipped properties
- VAT return and recovery
- Other regulations
- Inheritances and Donations Tax (“IDT”)
Updates
- Approval of the Bill by the House of Representatives (third constitutional stage)
- Approval of the Bill by the Senate (second constitutional stage)
- Senate Finance Committee Report
December 18th, amendments
- Amendments to the tax system
- Regulation for financial operations
- Other regulations
- General anti-avoidance rule (“GAAR”)
- Instant depreciation
- Special Programs
- Taxation on individuals
- Foreign Investors
- Foreign investments made by Chilean-residents
- Audits and taxpayers´ defense
- Tax litigation
- Surcharge of Real Estate Tax
In order to materialize the “memorandum of understanding” reached by the Chilean Finance Ministry and the Senate Finance Committee on December 18, 2019, the amendments to the Tax Modernization Project were presented for their legislative discussion, which are focused on SMEs, entrepreneurship and economic growth.
If the Tax Modernization Project is approved by the Senate, it will be sent back to the House of Representantives, as the originating Chamber. Once the amendments made by the Senate are approved by the House of Representantives, the bill will be sent to the President of the Republic to proceed with the final procedures of approval, enactment and publication of the law.
May 8th, amendments
- General anti-avoidance rule (“GAAR”)
- IRS assessment authority and tax-free reorganization rules
- Taxpayers’ rights
- Conflict resolution procedure before the IRS
- Settlements during tax litigation and weight of evidence
- Others regulations
Bill´s Proposals
- Amendments to the tax system
- General anti-avoidance rule (“GAAR”)
- Expense deductibility
- VAT Law
- Foreign investors
- Taxation on individuals
- Audits and taxpayers´ defense
- Appraisal authority and tax-free reorganization rules
- Foreign investments made by Chilean-residents
- Financial operations
- Tax compliance
- Digital Services
- Special Programs
- Non-profit organizations
- SME’s tax system
- Green Tax
- Estate and gift tax
