Chile: Dividend, capital gains not subject to VAT; other direct and indirect tax developments

A report that discusses direct and indirect tax developments

A report that discusses direct and indirect tax developments

The Chilean tax authority ruled that income arising from dividends or capital gains from the purchase and sale of shares or corporate rights was not subject to value added tax (VAT).

Specifically, the tax authority concluded that such income must be considered in the calculation of the additional VAT refund contemplated by article 27 bis of the VAT law, and therefore is not taxed with VAT.

Read a September 2023 report (Spanish and English) [PDF 586 MB] prepared by the KPMG member firm in Chile

Other direct and indirect tax-related topics discussed in this report include:

  • Modifications to Circular Letter No. 57 of 2022 providing instructions on the “luxury tax”
  • VAT on publication of digital advertisements
  • New instructions regarding the special credit for construction companies
  • Consultation on loss of residence and domicile in Chile for purposes of income tax treaty with Australia
  • Scope of the exemption from the “luxury tax” with respect to assets owned by a company that develops activities subjects to corporate income taxes
  • Application of VAT to services provided by a foreign entity
  • Reduction of tax costs and expenses in the case of an agricultural cooperative
  • Deduction for interest on loans intended for acquisition or construction of fixed assets
  • Tax treatment of a loan requested by a company for the partner's particular purposes
  • Tax treatment of the renunciation and donation of water use rights
  • Recognition of results derived from operations in foreign currency due to change of regime
  • Treatment of the single tax of article 107 of the Income Tax Law
  • Tax obligations of persons who do not reside in Chile
  • Tax treatment of freely available surpluses under income tax treaty with Portugal


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