International Tax Review is part of the Delinian Group, Delinian Limited, 4 Bouverie Street, London, EC4Y 8AX, Registered in England & Wales, Company number 00954730
Copyright © Delinian Limited and its affiliated companies 2023

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Chile’s tax reform discussion draws amendments

Sponsored by

Chile’s tax reform discussion draws amendments

As we have commented in previous articles, on August 23 2018, Chile's government presented a Tax Modernisation Bill, which aims to introduce a series of modifications to simplify the Chilean income tax system and incorporate new tax regulations.

As required by Chile's Constitution, the Tax Law Bill must firstly be discussed in the Chambers of Deputies. As a result, upon its filing it was assigned to the Finance Commission, where the Commission approved it on April 10 to move forward with its legislative discussion. Accordingly, it will now be discussed in detail in the Chamber of Deputies.

In order to facilitate the legislative discussion and further approval, the government, after several meetings and taking into account some concerns raised by opposing parties, announced that some amendments would be integrated into the Bill.

Although the government has not made public the way such amendments will be reflected in the Tax Bill, the principal guidelines for those modifications as per information available as of today are as follows:

  1. To eliminate some VAT exemptions, increase the digital services tax rate (from 10% to 19%, and to increase the tax on carbon emissions, among others). The aforementioned as informed by the Chilean government, seek to compensate for the lower tax revenue that would be expected from the total integration of the income tax regime;

  2. To improve the special tax regime for small and medium companies, broadening the number of taxpayers that could qualify;

  3. A new Tax Bill would be introduced to propose new forms of regional government financing;

  4. To modernise and strengthen Chile's Internal Revenue Service (IRS) and general anti-abuse rules (GAAR) provisions;

  5. To incorporate new measures in order to increase long-term investment and growth. In this regard, Chile's government is considering implementing modifications to asset depreciation rules;

  6. To lower the VAT special construction credit; and

  7. To lower the territorial tax for the elderly of low and medium classes.

In order for the Tax Bill to become a law, it should first be approved by the Chambers of Deputies and then by the Senate.

With this process, it is likely that new changes and amendments are discussed, and therefore, a completely different outcome could emerge from this.

Therefore, this is a matter that should be closely monitored in order for companies to prepare for the tax modifications to be enacted.

more across site & bottom lb ros

More from across our site

The General Court reverses its position taken four years ago, while the UN discusses tax policy in New York.
Discussion on amount B under the first part of the OECD's two-pronged approach to international tax reform is far from over, if the latest consultation is anything go by.
Pillar two might be top of mind for many multinational companies, but the huge variations between countries’ readiness means getting ahead of the game now, argues Russell Gammon, chief solutions officer at Tax Systems.
ITR’s latest quarterly PDF is going live today, leading on the looming battle between the UN and the OECD for dominance in global tax policy.
Company tax changes are central to the German government’s plan to revive the economy, but sources say they miss the mark. Ralph Cunningham reports.
The winners of the ITR Americas Tax Awards have been announced for 2023!
There is a ‘huge demand’ for tax services in the Middle East, says new Clyde & Co partner Rachel Fox in an interview with ITR.
The ECB warns the tax could leave banks with weaker capital levels, while the UAE publishes guidance on its new corporate tax regime.
Caroline Setliffe and Ben Shem-Tov of Eversheds Sutherland give an overview of the US transfer pricing penalty regime and UK diverted profits tax considerations for multinational companies.
The result follows what EY said was one of the most successful years in the firm’s history.