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    GMS Flash Alert 2023-215

    Chile – Tax Treaty with U.S. Approved by Chilean Senate

    GMS Flash Alert 2023-215 | November 16, 2023

    On November 15, 2023, the Chilean Senate approved the income tax treaty with the U.S., this being its final stage of legislative deliberation.1 It was first approved by the Chilean Chamber of Deputies on November 8, 2023 (for prior coverage, see GMS Flash Alert 2023-205, November 6, 2023).

    The document now must be ratified by the President of the Republic and it will be in force once diplomatic letters are then exchanged by the two countries. Expectations are that the treaty will be in force by January 2024.

    Why this matters

    The Chilean Senate’s approval of the treaty was a step forward that will introduce a new era in cross-border commerce between Chile and the United States, facilitating the movement of globally-mobile employees coming to the United States from Chile and vice versa.

    This treaty should help mitigate double taxation that international assignees can be exposed to and may provide further benefits, including relief for contributions to pension plans.

    KPMG Insights

    Short-term assignees (known also as “business travelers”) could be exempt from taxation in the host country if their presence is under 183 days in any 12-month period, and no charge-backs and no payments are made locally, thus bringing more flexibility to employers with regards to short-term assignment planning and budgeting, which would encourage expansion of business opportunities in the country.

    Contacts

    angelo-adasme
    Angelo Adasme

    Partner, Tax - IES

    KPMG in Chile

    juan-pablo-mery
    Juan Mery

    Manager

    KPMG in Chile

    Additional Resources

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    Footnotes

    1 Article published (in Spanish) on the Ministerio de Hacienda (Chilean Ministry of Finance) website on November 15, 2023, at: https://www.hacienda.cl/noticias-y-eventos/noticias/acuerdo-que-evita-doble-tributacion-con-estados-unidos-quedo-listo-para .

    Disclaimer

    The information contained in this newsletter was submitted by the KPMG International member firm in Chile.

    GMS Flash Alert is a Global Mobility Services publication of the KPMG LLP Washington National Tax practice. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

    © 2024 KPMG Auditores Consultores Limitada, una sociedad chilena de responsabilidad limitada, y KPMG Servicios Chile SpA, una sociedad chilena por acciones, ambas firmas miembro de la organización global de firmas miembro de KPMG afiliadas a KPMG International Limited, una compañía privada inglesa limitada por garantía (company limited by guaranty). Todos los derechos reservados.