Below you will find the more trades you relevant issued by the Internal revenue Service during the second fortnight of July.
Income tax
i. Oficio N° 1446 of 19/07/2024
The client, taking into account the publication in the Official Journal of the Convention between the Government of the Republic of Chile and the Government of the united States of America for the avoidance of double taxation (Convention), an association acting on behalf of its partners, it asks:
1) to Clarify the manner in which they must be accredited to the requirements of article 24 of the Convention on limitation of benefits, to consider a person as “qualified” and can access the benefits of the Convention and, in particular, if the Annex N° 1 of the Resolution Ex. N° 58 of 2021 is sufficient to do this.
2) Report to you if, due to the time delay in the issuance and apostille of certificates of residence for part of the tax administration of the united States of America (EE. UU.), there is some kind of white march or coordination between tax administrations in function of the resolution N° 3 of the Resolution Ex. N° 151 of 2020.
Answer:
1) To get the benefits set out in the Convention in Chile, the affidavit contained in the Annex N° 1 of the Resolution Ex. N° 58 of 2021 is not a document sufficient to prove the character of a “qualified person” set out in article 24 of the Convention.
2) As required by paragraph (tenth second of the N° 4 of article 74 of the LIR the certificate of residence issued by the competent authority of the respective country allows to presume, unless the contrary, the tax residency of the taxpayer.
All in all, in exceptional cases and according to the circumstances, as indicated in the query, can be accompanied by a copy of the document stating that it has applied for a certificate of residence to the tax authorities, provided and when it is accompanied by the certificate of residence throughout the same calendar year that was not effected the retention attesting that had the quality of a resident at the time of the accrual of additional tax.
ii. Oficio N° 1450 of 19/07/2024
AAA is a fund formed and existing under the laws of the British Virgin Islands, regarded as fiscally transparent, so that the income are subject to taxation at the level of the people who have interest in him, stressing that the 97% of these people are residents of the united States (U.S.).
He adds that AAA would be owner in their entirety BBB, a company incorporated in the US, considered as a “disregarded entity” for purposes of the federal income tax of the said country, which, in turn, is a shareholder of an administrator of the pension fund in Chile, from which perceives dividends.
He adds that the administrator of the pension funds would be returned to title debit tax an amount equal to 35% of the amount of the credit for the tax of the first category (IDPC), which would not be correct, attended the provisions of article fourth transient of the Law N° 20.899, which allows you not to return such amounts in respect of income that they perceive residents in countries with which Chile has signed an agreement to eliminate double taxation, even though it is not in force.
The petitioner requests to confirm that:
1) AAA and BBB are considered to be transparent.
2) accompanying documents (Forms W-9 and W-8IMY) comply with the requirements set out in the Resolution N° 151 of 2020 to prove that the beneficiaries of AAA and BBB are residents of U.S.
3) accordingly, the dividends have the total of the credit for the tax of the first category, without which it is applicable, the obligation of return of 35% of the credit, in accordance with article fourth transient of the Law N° 20.899.
Answer:
1) AAA and BBB will be considered transparent to the extent that comply with what is indicated in the operative 7° of Resolution N° 151 of 2020.
2) In the case of not being able to be obtained the certificate of residence in the U.S. due to the tax authority of that country is issued only for the application of the conventions in force –a question that must be justified by the taxpayer–, may be submitted in Chile other documents that show proof of tax residence for purposes not make restitution of the credit for IDPC, if and when such documents are issued, issued or authorised by the competent tax authority of that country. Well, and, exceptionally, in the absence of a Convention in force at the time of the query, but signed prior to January 1, 2020, you can check in on Chile residency in USA. UU. of the beneficiaries with different documents to the certificate of residence for the purposes of the convention, as long as they are issued, issued or authorised by the competent tax authority of that country, as indicated in the analysis.
Forms W-9 and W-8IMY accompanied by the consultant may be submitted for the purposes of demonstrating the above, but they by themselves do not constitute background sufficient that allow to prove the residence and the participation in the fund.
3) To check what is indicated in the preceding sections, it will not be from the obligation to refund on the credit for IDPC.
iii. Oficio N° 1485 of 25/07/2024
The petitioner asks whether the personal services rendered in the united States, that would have been subject to the additional tax, no longer would be subject to the tax, to count in February 2024, pursuant to the Agreement between Chile and the united States to avoid double taxation, not requiring any administrative proceeding to their use.
Answer:
The personal services rendered independently by a person resident qualified” in EE. UU. only be taxed in that country in accordance with article 14 of the Convention, provided that it does not meet any of the assumptions set out in points (a) or (b) of that article (the existence of a fixed base or stay for a period or periods which together add up to or exceed 183 days in any twelve month period), in which case Chile may tax the income without limits according to its internal legislation.
If the personal services rendered in EE. UU. subject to the provisions of article 5 of the Convention, and depending on the shape, the duration and the place of delivery, can be taxing the income attributable to the permanent establishment in Chile without limit.
Then, in the event that only EE. UU. can tax the income, with the object of not performing in Chile, a withholding tax or perform with the rate lowered concerned, the payer of such income must demonstrate that the beneficiary of the payment is a person who is resident of USA. UU. by a certificate of residence issued by the competent authority, and complete a sworn statement in accordance with paragraph tenth second of the N° 4 of article 74 of the Law on Income Tax.
Law on Tax on Inheritance, Assignments, and Donations
i. Oficio N° 1488 of 25/07/2024
A father will give his children some lots of land from the subdivision of a tract of agricultural property that is currently only have “pre roles”, referring to what is the appraised value of those for the purposes of the innuendo and the calculation of the tax on the donations, and how you should complete the electronic form of declaration of such a tax, given that the batch does not have a role of valuation of the individual.
Answer:
In the case of donations of lots that are not “pre roles”, it should consider the valuation of the land for agricultural subdivided in effect during the semester in which the written request for authorization to the competent court (overture), in the part that proportionally corresponds to each one of them. In this semester, the donee shall be filed with the IRS the respective electronic form 4412, on the declaration of taxes, inheritances and donations. For this purpose, you must first apply to this Service, the issuance of a certificate of valuation proportional to each of the lots that will be donated.
Finally, the respective batches will have to be incorporated in “Other assets and/or rights not considered in the previous points”, the subsection “Other”, in the section “Declaration of Assets”, the electronic form 4412.
