All kinds of assets, whether movable or immovable, tangible or intangible, such as shares or rights in companies, may be declared.
On September 25, the Chamber of Deputies approved the Tax Compliance Bill, which is now ready for enactment. Once published in the Official Gazette, it will become law.
The bill establishes a transitory regime that will allow regularizing foreign capitals, in a voluntary and extraordinary manner, declaring assets and income abroad, paying a single tax rate of 12% (similar to the “super eight” of 2014).
This benefit will be available from the month following its publication and until November 30, 2024. From az Tax Group, we recommend to evaluate from now on the possibility of taking advantage of this process.
The following are the main aspects to consider:
Who is eligible?
Taxpayers domiciled, resident, established or incorporated in Chile, who have acquired before January 1, 2023, assets and income located abroad, not timely declared and not taxed in Chile.
Single Tax: A single tax of 12% will be applied on the value of the regularized goods or income, replacing other taxes that may be affected, without the right to credit against other taxes.
What goods can be declared?
All kinds of assets, whether movable or immovable, tangible or intangible, such as shares or rights in companies incorporated abroad. As well as all kinds of financial instruments or securities that can be paid in foreign currency:
- Currencies.
- Income from the aforementioned assets, such as dividends, profits and interest.
What will the valuation of assets be like?
The commercial value of the assets must be reported according to the established rules: In the case of shares, rights or any title over companies or entities incorporated abroad, bonds and other debt securities, securities, instruments and any asset traded abroad in a market regulated by public entities, it will be the average price recorded in such markets within the six months prior to the date of filing.
It is important to consider that:
- In the case of financial investments comprised of different instruments and contracts, the global balance of all of them will be considered, according to the certificates or bills issued by the respective financial or banking institutions as of December 31, 2023.
- their commercial or market value, based on a valuation report prepared by independent auditors.
In addition to the above, the value determined, once the single tax has been paid, will constitute the tax cost of such goods. If the value of the goods is not credited, the SII may appraise them in accordance with the provisions of art. 64 of the Tax Code.
What are the benefits?
Voluntary regularization with no obligation to repatriate the assets, with immunity from future legal actions related to the omission of declaration of assets.
Procedure:
- Proving ownership of the goods, origin and value of the goods.
- The single and substitute tax remittance will be issued within 5 working days and payment must be made within the following 10 working days.
- The SII will have 12 months to audit the declaration. Once the term has expired, it will be presumed that the tax return has been filed in accordance with the law.
- With the filing of the declaration, the SII, the Financial Analysis Unit and any other State institution are authorized to request specific information from the banks on the income or assets included in the declaration.
Limitations:
- It does not apply to assets located in tax havens (or considered high risk or non-cooperative).
- Persons formalized, convicted or under trial for crimes related to money laundering, bribery, tax crimes, among others, are not eligible.
For more information on the application of the transitional regime, we recommend consulting our tax group:
Rodrigo Albagli | Partner | ralbagli@az.cl
Álvaro Rosenblut | Partner | arosenblut@az.cl
Andrea Bobadilla | Director tax group | abobadilla@az.cl
Valentina Herrera | Aassociate | vherrera@az.cl
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