Strategizing International Tax Best Practices – by Keith Brockman

Chile’s Internal Revenue Service (IRS) recently issued Resolution No. 48, prescribing rules for eligibility from a tax treaty including a sworn statement from the resident country beneficiary.

EY’s Global Tax Alert provides the relevant details:

http://www.ey.com/Publication/vwLUAssets/Chile_issues_guidance_on_statement_required_to_benefit_from_a_Tax_Treaty/$FILE/2015G_CM5654_Chile%20issues%20guidance%20on%20statement%20required%20to%20benefit%20from%20a%20Tax%20Treaty.pdf

Key observations;

  • A certificate of residence is required to be issued by the Competent Authority of the recipient jurisdiction.
  • A sworn / notarized statement must be provided, with the statement date requiring conformity with the month in which amounts are paid.

Failure to provide the requisite documents will allow the IRS to collect the amounts that should have been withheld, absent treaty benefits, in addition to fines.

Countries are placing formalistic and dissimilar requirements to receive treaty benefits, thereby requiring advance planning and awareness of treaty eligibility.  Such mechanisms continue to add to the international tax complexity for obtaining tax treaty benefits.

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