Chile: Conceptual engineering costs not eligible for VAT refund on fixed assets; other direct and indirect tax developments

The tax authority (SII) ruled in Ruling No. 1251/2024 that "conceptual engineering" services constituted organizational/start-up expenses and were not part of the taxpayer’s direct cost of constructing a plant for production of green hydrogen. As such, the costs were not eligible for the benefit contained in Article 27 bis of the value added tax (VAT) law, which allows a refund of VAT imposed on costs incurred for services included in the cost of a taxpayer’s fixed assets.

Read a July 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:

• Extension of deadline for filing transfer pricing affidavits (Resolution Ex. SII No.70)
• Documents to be issued for the sale of tickets to parks protected by the State (Ruling No. 1250/2024)
• VAT exemption under letter F of Article 12 of the VAT law (Ruling No. 1218/2024)
• Life insurance annuities with voluntary pension savings (Ruling No. 1221/2024)
• Application of corporate income tax rules on higher value of disposal or redemption to redeemable and non-redeemable investment funds (Ruling No. 1220/2024)
• Application of the special credit for construction companies in case of modification of a building permit (Ruling No. 1175/2024)
• Recognition of the inflationary adjustment of a loan received by a company with foreign currency accounting (Ruling No. 1147/2024)