Law 20,899, which enacted on 8th February 2016, allows Chilean companies to pay a 32% substitute tax on all or part of their accumulated taxable profits balances from 31 December 2015 to 31 December 2016. They may also credit any corporate taxes paid against the 32% substitute tax. In newly released guidance, the Chilean Internal Revenue Service (IRS) stated how Chilean companies may designate and pay 32% substitute tax at any time during 2016 on all or part of their accumulated taxable profits balance from 31st December 2015 and until 30th April 2017, on all or part of that balance as of 31st December 2016.
In addition, Law 20,898 efficiently permits companies to report commissions paid abroad from 2010 through 2014 on unreported transactions applying for withholding tax exemptions. The time limit for reporting these payments is 30th June 2016. According to Resolution No. 27 (issued on 5th April 2016), the IRS needs Chilean companies electing to pay the 32% substitute tax file through Form No 50 electronically. The IRS also requires that Chilean companies interested in claiming withholding tax reliefs for commissions paid abroad from 2010 through 2014, on transactions that were unreported to tax authorities to file through Form 1854 electronically by 30th June 2016 electronically. Note that, companies must report the 2010 through 2014 commissions with their 2015 commission payments.
