Import and distribution agreement between a winery resident in Chile and a company resident in the United States
The tax authority (SII) ruled in Ruling No. 686/2024 that an import and distribution agreement between a winery resident in Chile and a company resident in the United States, which was signed, performed and breached in the United States, generally did not generate Chilean source income for the U.S. company.
On the other hand, fees paid by U.S. company to the winery for terminating the contract and indemnifying the winery for lost profits generated foreign source income for the winery. Such payments did not constitute remuneration for services rendered abroad, however, and therefore were not subject to additional tax.
Read an April 2024 report (Spanish and English) prepared by the KPMG member firm in Chile
Other direct and indirect tax-related topics discussed in this report include: