Chile: Taxation of shares in company resident in preferential tax regime under indirect sale rule; other direct and indirect tax developments

The tax authority (SII) found (ruling 1154/2025) that an indirect sale of a Chilean company through the sale of shares of a company resident in the British Virgin Islands (BVI) (a preferential tax regime) was subject to taxation in Chile under the indirect sale rule—even though the value of the Chilean company represented less than 20% of the market value of the shares of the BVI company and was less than the generally applicable 210,000 UTA threshold for taxation.

The SII held that because the shares sold were in a company resident in a preferential tax regime jurisdiction, it was not necessary to verify the market value of the underlying Chilean company, nor the relative percentage of the market value of the same in proportion to the value of the shares sold. In addition, proof showing the exception for situations in which the shareholders who control, directly or indirectly, 50% or more of the capital or profits of the foreign company disposed of, are residents in a jurisdiction that does not have a preferential tax regime, was not provided.

Read a July 2025 report (Spanish and English) prepared by the KPMG member firm in Chile

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

• Determination of the effective foreign income tax rate on passive income
• Tax treatment of cross currency swaps
• Applicability of the general anti-abuse rule (GAAR) in a reorganization
• Value added tax (VAT) recovery in bankruptcy liquidation proceedings
• Instructions regarding how banks must require certain customers to start activities
• Verification of commencement of activities by state agencies, payment method providers, and digital platforms
• Procedure for obtaining RUT (Tax ID) and starting activities
• Procedure for granting annual certification of tax sustainability
• Instructions on cooperation agreements with business groups