Tax compliance regulations
Withholding and filing rules
- Only companies will have withholding duties.
- Amendments to withholding rules regarding the WHT applicable to dividend and profit distributions abroad. The Corporate Tax credit must be applied according to the provisional Corporate Tax rate that would have corresponded to apply during the preceding year.
- Amendments to withholding rules applicable to capital gains.
- Amendments to withholding rules in tax treaty scenarios.
- Amendments to withholding rules regarding sporadic income subject to Personal Income Tax.
- Amendments to withholding rules applicable in case of indirect transfer of Chilean assets.
- Standardization of withholding rules applicable to income derived from Article 104 bonds. The applicable taxes must be withheld by representatives, custodians, intermediaries, securities deposits or other agents appointed as responsible for the foreign taxpayer’s tax liabilities.
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 accountability when it does 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.
- Elimination of joint liability of managing partners, managers or administrators, for not complying with the withholding obligation.
- Elimination of joint liability of the Chilean assets’ owner, in case of indirect transfer of Chilean assets.
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.