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Chile

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Tax authorities

Servicio de Impuestos Internos
Teatinos 120, Santiago de Chile
Tel: +56 2 473 2000
Website: www.minhda.cl/el-ministerio.html

Tax rates at a glance

(As of September 2011) 

Corporate Income 20%
Capital Gains 20%/35%
Branch Tax 20%
 
Withholding Tax
Dividends 35%
Interest 35%
Royalties from Patents, Trademarks, Formulas and Similar Items 30%
Technical Services 15%
Other Fees and Compensation for Services Rendered Abroad 35%
Branch Remittance Tax 35%
 
Net Operating Losses (Years)
Carryback Unlimited
Carryforward Unlimited
  • The corporate income tax rate of 17% is temporarily increased to 20% for 2011 and to 18.5% for 2012.
  • Withholding tax on dividends, interest, royalties from patents, trade marks, formulas and similar items, and other fees and compensation for services rendered abroad applies to payments to nonresidents.
  • Withholding tax on dividends is applied to the amount of the grossed-up dividend. A credit equal to the corporate tax paid is available.
  • A reduced withholding tax rate on interest of 4% applies to certain interest payments including, but not limited to, interest paid on loans granted by foreign banks, insurance companies, financial institutions, and interest paid with respect to import operations.
  • The withholding tax rate ON royalties from patents, trade marks, formulas and similar items is reduced to 15% for payments for these:
    - Invention patents
    - Models
    - Industrial drawings and designs
    - Layout sketches or layouts of integrated circuits
    - New vegetable patents
    - Use or exploitation of computer programs (software)
    The reduced tax rate does not apply to payments made to related entities or to companies resident in countries included in a list prepared by the Chilean Ministry of Finance containing the territories considered to be tax havens. As a result, the withholding tax rate for such payments is 30%. Two companies are considered to be related if one of these conditions is satisfied:
    - Either company owns 10% or more of the other company's capital.
    - Either company participates in 10% or more of the other company's revenues.
    - A shareholder or owner owns 10% or more of each company or participates in 10% or more of its revenue.
  • A 15% withholding tax rate on technical services applies to payments for engineering, technical assistance, professional and other technical services rendered in Chile or abroad. However, if the parties are related (see above) or if the payments are being made to a company domiciled in a country included in the tax-haven list (see above), the withholding tax rate is 20%.
  • The 35% branch remittance tax is applied to the grossed-up branch remittance. A credit is available for the branch level tax paid, resulting in an 18.75% effective tax rate on the amount of the net remittance.

Source: Ernst & Young

Chile

Sandra Benedetto and Benjamín Barros
PwC
Chile

The effort to reconstruct Chile after the earthquake last year has diverted the government's attention away from any radical tax reform, however, transfer pricing legislation is on the way, explain Sandra Benedetto and Benjamín Barros of PwC

[Show full article]

Tax

Carey y Cía is Chile's largest law firm and has one of the best tax practices in the country. Peers say the group's clients as "some of the best in the market". The tax practice has a team of highly regarded attorneys and accountants and is a favourite ... [more]

Ernst & Young has a tax group of 150 professionals, such as partner Ricardo Escobar who joined the firm in 2010 and is well known as a cross-border structuring specialist. The tax department is headed by Pablo Greiber, who is highly proficient in various ... [more]

Founder of Baraona Marré Abogados, Juan Manuel Baraona is recognised by competitors for his corporate tax and tax controversy work. Baraona is also "a respected transfer pricing adviser and has experience in all taxation developments in the market," ... [more]

Anthony Cook heads Deloitte's tax department and leads a team of 10 partners. Eight specialists work in the international corporate tax practice. Cook and fellow partners Carolina Araneda and Joseph Courand completed several acquisitions and structuring ... [more]

KPMG is led by Francisco Lyon, who has headed the tax department since August 2010. The firm also appointed John Droguett, Francisco Scolari and Rodrigo Stein as partners and added three new directors to the tax practice in the same month. In February ... [more]

Philippi Yrarrázaval Pulido & Brunner's tax practice grew in the last year. Its most notable addition was senior associate, Patricio Silva-Riesco, former chief of legal defence of the Chilean Tax Authority. Philippi has strong relationships with law ... [more]

PwC

Five years ago the PwC tax team in Chile consisted of 80 tax professionals; since that time the practice has doubled in size. Mario Fernández Vila and Julio Pereira left the firm, in March 2010, for senior positions in the Chilean Internal Revenue Service. ... [more]

Baker & McKenzie's Chilean tax practice advises multinational corporations in areas such as transactional tax services and domestic tax planning. The tax group is comprised of one partner and four associates. Several members of the group have foreign ... [more]

Cariola Díez Pérez-Cotapos & Cía advised Alberta Management in it's $8.9 million purchase of Autopista Centralin highway from Swedish construction firm Skanska in April 2011. Pedro Deutsch and Juan Pablo Orellana, the heads of department, worked on the ... [more]

Alessandri & Compañía has a small established tax practice. Senior associate Miguel Massone is a rising star with a good reputation among competitors in the Chilean market and well known for his transfer pricing skills.

Cabello Letonja & Cía is a boutique firm with a highly specialised tax practice that has quickly gained recognition in the Chilean market. The firm's founding partner Alexander Letonja hopes that the finalisation of a recent relocation from downtown ... [more]

Jorge Carraha of Claro y Compañía remains influential in the Chilean market and is praised for his outstanding and meticulous work.

EPT Tax Advisors' founding partner Christian Blanche Reyes is highly regarded as a tax planner, compliance specialist and litigator.

Noguera Larrain & Dulanto is led by managing partner Arturo Garnham. In May 2010 the firm added associate Roland Matthei to its tax practice.

Salcedo & Cía is a small firm of tax attorneys , auditors andandtransfer pricing specialists. Itis part of the international alliance, Transfer Pricing Associates (TPA), from which it gets top-quality referral work. Founding partner Claudio Salcedo ... [more]

See also

Chile
Latin America

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