Chile: Guidance on determination of foreign tax credit with respect to dividends; other tax developments
Summary of recent tax developments
Ruling No. 1465/2026 provides guidance on how to determine the foreign tax paid credit (IPE credit) when a Chilean company receives dividends from a foreign holding company that, in turn, accumulates profits from investments in different countries.
The IPE credit generally must be determined by considering the taxes paid abroad that correspond proportionally to the profits ultimately distributed to Chile. However, under Ruling No. 799 of 2023, when the legislation of a country from which a remittance is made does not establish ordering rules to identify which specific profits are being distributed to Chile, taxpayers must apply a proportionality calculation considering the ratio between taxable profits and the total accumulated financial profits of the foreign entities.
Because it may be difficult to access financial information from foreign companies (particularly in structures with minority interests) and there may be differences between financial and taxable results in the various jurisdictions involved, Ruling No. 1465/2026 provides that financial profits no longer need to be considered as part of the calculation.
Read a July 2026 report prepared by the KPMG member firm in Chile
Other tax-related developments discussed in this report include:
- Ruling No. 27/2026: New interest and penalty waiver policy
- Ruling No. 1418/2026: Application of the Chile-Netherlands income tax treaty to training services
- Ruling No. 1407/2026: Tax consequences of unreliable invoices
- Ruling No. 1538/2026: VAT on invoice intermediation services
- Ruling No. 1412/2026: Issuance of settlement invoices
- Ruling No. 1531/2026: Stamp tax on refinancing granted by bank branches abroad
- Ruling No. 1529/2026: Tax deduction of carbon credits