Chile: Tax treatment of transfer of invoices to U.S. resident company; other direct and indirect tax developments
A report discussing recent direct and indirect tax-related topics.
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November 21, 2024
When a U.S. company buys invoices or loan portfolios from a Chilean company at a discount and then collects the full amount from the debtors, the profit made from this difference is taxed differently depending on whether it's from invoices or loan portfolios.
- Loan portfolios:
- Profits are generally taxed at 35%, but this can be reduced to 4% if certain conditions are met.
- If the Chile-United States tax treaty applies, the profits may be taxed in Chile at a maximum rate of 4% or 10%.
- Invoices:
- Profits are taxed at a flat rate of 35%.
- If the tax treaty applies, these profits are considered business profits and are not taxed in Chile, unless the U.S. company has a permanent establishment in Chile.
The tax rate can vary significantly depending on the type of debt (loan portfolio or invoice) and whether the tax treaty between Chile and the United States is applied.
Read a November 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:
- Procedure for registration in the simplified value added tax (VAT) taxation system for taxpayers with no domicile or residence in Chile
- Documentation associated with services provided by independent workers of digital platforms without residence in Chile
- Establishes the obligation to annually submit information on financial accounts
- Establishes the form to use the voluntary and extraordinary declaration of assets or income system
- Establishes the procedure for the early termination of pending judicial proceedings
- Determination of ISIF (Impuesto Sustitutivo de los Impuestos Finales)-eligible profits
- Donations made in accordance with the provisions of Article 157 ter of the Labor Code
- Leasing of goods subject to the credit established in the Austral law
- Reduction of the VAT taxable base in the lease of furnished real estate
- Validity of the tax compliance law