Our director David Ancelovici refers to the agreement that came into effect on January 1 and that reduces the tax burden on flows.
On January 1 of this year it left with renewed air for American investors in Chile. On that day, the long-awaited agreement that avoids double taxation for investments and taxpayers from both countries came into force, after more than a decade of processing in the congresses of both nations.
Among the main practical effects, the reduction of the withholding tax on dividends from 30% to 5% stands out, for example, the reduction of the total burden on a shareholder from 44.45% to 35%, and that cross-border services will pass to be exempt from withholding fees, to name a few of them.
In the tax and legal world, they draw happy accounts of the first three months of the agreement, confirming greater activity in that market, associations with studies on North American soil, more investments and changes of tax domicile to that country.
Background Requests
For the director of the Tax de az Group, David Ancelovici, an issue that has highlighted in the consultations is the information exchange procedures established by the agreement, since now the Internal Revenue Service (SII) has the ability to request information from the Internal Revenue Service (IRS) on Chilean investors who have paid taxes in the US.
“The SII could request information on additional tax payments made by Chilean investors through US financial entities, even if said amounts have not been declared in Chile,” it observes, pointing to another consequence of this rule: “There is a greater to regularize investments in the US.”
