These profits will not be considered withdrawn, distributed or remitted by the final taxpayers and will be registered in the Registry of Exempt Income (REX).
On Tuesday, July 30, the Internal Revenue Service published Circular No. 34, which provides instructions on the application of the optional regime of the new substitute tax for final taxes created as a result of the fires that occurred in the fifth region.
Although, on July 1, 2024, the Law that creates the Transitory Emergency Fund for fires in the Valparaíso Region and establishes other measures for the reconstruction [See here] was published, the instruction issued by the tax authority is important, since it specifies the existing requirements to benefit from the regime, credits for taxes paid abroad, the tax treatment of the amounts paid for ISIF, among other aspects.
This fund contemplates the creation of a new substitute tax for final taxes applicable to the profits accumulated in the Register of Income Affected to Tax (RAI).
Below, we address its most relevant points:
Taxpayers who may qualify for the tax incentive
It is established both for taxpayers under the rules of the general or semi-integrated regime and in the Pro-SME regime, that at the end of the 2023 commercial year they maintain a balance of taxable profits accumulated in the RAI registered as of January 1, 2017, balance that includes the accumulated profits generated until December 31, 2016.
Applicable rates
A rate of 12% is established for the general regime, without the right to deduct accumulated credits. Meanwhile, for the Pro-SME regime, a 30% rate will be applied with the right to deduct credits with a limit on the balance of accumulated credits (SAC).
Deadlines
The option can be exercised until the last banking day of January 2025. In addition, it will be up to the Internal Revenue Service through a resolution to enable the declaration and payment form.
Determination of RAI eligible for substitute tax
Taxpayers may receive all or part of the RAI balance. For the purposes of determining the available balance, the withdrawals made during the year charged to this record, duly readjusted, will be deducted from the RAI balance as of December 31, 2023.
Charging order
These profits will not be considered withdrawn, distributed or remitted by the final taxpayers and will be registered in the Registry of Exempt Income (REX). They will not be subject to the order of allocation at the time of withdrawal or distribution.
For more details about the application of the transitional rule (law still pending promulgation), you can consult our Tax group.
Álvaro Rosenblut | Partner | arosenblut@az.cl
Rodrigo Albagli | Partner | ralbagli@az.cl
Andrea Bobadilla | Tax Group Director | abobadilla@az.cl
Valentina Herrera | Associate | vherrera@az.cl
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