Strategizing International Tax Best Practices – by Keith Brockman

Posts tagged ‘Chile IRS’

Chile: BEPS + disclosures

The Chilean Internal Revenue Service has implemented a 24 question disclosure based on BEPS, although going farther than the OECD’s Actions.  EY’s Global Tax Alert is provided for reference:

Highlights:

  • Percentage of related party revenues
  • EBITDA percentage of related party expenses
  • Foreign related parties with no staff or relevant assets, and identify those which participated in intercompany transactions
  • Corporate reorganizations, transfer of functions involving foreign companies.
  • Taxpayers listed in the Large Business Division (Grande Contribuyente) must file SS No. 1913, as well as those considered large companies by the Chilean IRS. SS No. 1913 must be filed annually from 2016 onwards before filing the corporate return (Form 22), which is due in April.

A careful reading of the new disclosures should be undertaken by those having Chilean operations; this is also a trend that will probably develop in other countries.

 

Click to access 2016G_CM6128_Chile%20creates%20new%20sworn%20statement%20linked%20to%20BEPS%20Actions.pdf

Chile: Treaty Requirements

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:

Click to access 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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