Chile: Tax compliance bill approved by Congress includes income tax, VAT, and transfer pricing measures

The Tax Compliance Bill, which includes the tax measures described below, was recently approved by Congress.

• The current general anti-avoidance rule (GAAR) would be modified in terms of application requirements, statute of limitations, administrative procedure, and interaction with special anti-avoidance rules.
• Various amendments to the transfer pricing rules would be introduced, including the concept of the arm's length principle in line with OECD guidelines and reinforcement of the concepts of functions, assets, and risks assumed by the parties.
• Modifications would be made to the rules regarding the recognition of passive income of controlled foreign companies (CFCs).
• The maximum value of goods imported occasionally and for non-commercial purposes that may be exempt from customs duties and value added tax (VAT) on their importation would be increased from US$ 41 to US$ 500.
• The operator of a digital intermediation platform would be established as a regular VAT taxpayer.
• New options to repatriate assets and goods located abroad would be introduced, with a rate of 12%.

The bill must be reviewed by the Constitutional Court and signed by the president before becoming law, but no material changes are expected.

Read a September 2024 report (Spanish and English) prepared by the KPMG member firm in Chile that describes the above tax measures in more detail, as well as other tax measures included in the bill.