Starting this year, six new double tax treaties signed by Chile have entered into force and are in full application with the following countries: Argentina, the People’s Republic of China, Italy, Japan, the Czech Republic and South Africa.
These treaties determine from the point of view of the taxation in Chile reductions or exemptions from withholding rates for services, interests, royalties and capital gains. In addition, the treaties allow investors that are residents in those countries to benefit from a maximum dividend tax rate of 35%, instead of the 44.2% applied to those who have opted for the semi-integrated tax regime. The treaties also regulate the situations of permanent establishments and the taxation of residents in both states with respect to the income derived in the other state.
In the case of companies that are resident in the countries indicated that receive payments from Chile for services, interest, royalties or capital gains, we recommend to check if the reduced rates or exemptions are applicable in case they correspond, according to the norms of each treaty.