Since 2003, the characterisation of a preferential tax
regime in Chile was entrusted to a fixed blacklist of 39 tax
haven jurisdictions based on the OECD report of 1998, 'Harmful
Tax Competition: an Emerging Global Issue', and its 2000
update. The aforementioned blacklist was issued by the Chilean
Ministry of Finance (Decree 628 of 2003) and was relevant
regarding certain international transactions, triggering the
application of special rules when such transactions were
performed involving a tax haven (i.e. long arm capital gain
rules, thin capitalisation rules, royalty payments and
remuneration for services).
Tax Reform Law 20.780 of 2014 introduced Article 41, letter
H to the Chilean Income Tax Law, setting new criteria in order
to determine whether a preferential tax regime was
characterised for Chilean tax matters. According to such
provision, a jurisdiction or territory would be deemed as
having a null or preferential tax regime, when at least two of
the following requirements were met: (a) its effective tax rate
for foreign income is less than 17.5%; (b) the jurisdiction has
not entered into an agreement with Chile for the exchange of
information for tax purposes; (c) legislation of the
jurisdiction does not provide for transfer pricing rules, which
substantially comply with OECD recommendations; (d) the
jurisdiction does not have the conditions to be considered as
compliant or substantially compliant with OECD international
standards in matters of transparency and exchange of
information for tax purposes; (e) the jurisdiction maintains
preferential tax regimes that do not follow OECD standards;
and/or (f) the jurisdiction only impose taxes on domestic
source income. Article 41, letter H allows taxpayers to apply
before the Chilean Internal Revenue Service for a specific
pronouncement, confirming whether a jurisdiction would be
deemed as having a preferential tax regime as per the
requirements set forth above.
Henceforth, since 2014, Chile has held two different rules
in order to determine whether a jurisdiction would be deemed as
having a preferential tax regime: one that provided a specific
list of tax havens, and another that required an analysis of
the requirements listed above.
Law 21.047 of November 23 2017 indirectly repealed the
blacklist established by the Ministry of Finance and, as of
December 1 2017, the characterisation of a preferential tax
regime was entrusted solely to Article 41, letter H.
The Chilean Internal Revenue issued a preliminary list of
possible preferential regimes in December 2017 (Resolution 124
of 2017) that included 150 preferential tax regimes. In July
2018, an updated list was issued by the tax authority
(Resolution 55), reducing the list from 150 to 147 preferential
regimes. Uruguay and Panama were excluded from the list, as
both jurisdictions signed the Convention on Mutual
Administrative Assistance in Tax Matters (MAAT) and introduced
amendments to their internal tax legislation following BEPS
recommendations.
The preferential tax regimes list is expected to be updated
periodically, at least once a year, according to the Chilean
Internal Revenue Service. This matter should be closely
monitored as countries continue to adapt to new standards and
trends on international taxation and transparency.
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Santiago
López |
Ignacio
Núñez |
Santiago López (santiago.lopez@cl.pwc.com)
and Ignacio Núñez (ignacio.nunez@cl.pwc.com)
PwC Chile
Tel: +56 229400556
Website: www.pwc.cl