The tax authority in Chile has issued Circular No. 1985 in relation to the taxation of Chilean-sourced investment income of foreign investors. The Circular explains the responsibility of the foreign investor to advise any change of residence to the Chilean tax authority. It discusses solely the residence of corporate income taxpayers. The Circular confirms the two applicable rates on Chilean-sourced dividends and similar income derived by foreign investors:
- 45% income tax rate for non-treaty countries; and
- 35% income tax rate for treaty countries.
Thus, any change of residence status of foreign investors from a non-treaty state to a treaty state should be informed to the Chilean tax authority as soon as it becomes effective.
