The Tax Administration of Chile announced on 5th January 2017 that a new tax regime enters into force from 1st January 2017 as introduced by the 2014 Tax Reform. Companies under the attributed income regime have to pay first category tax at a 25% rate.
On the other hand, those under the semi-integrated regime must pay first category tax at a 25.5% rate during the commercial year 2017 and 27% from 2018. In the case of the attributed income regime, the company owners are taxed in the same fiscal year for all income generated by them, regardless of a number of profits they withdraw. The shareholders or community members are allowed to use the whole first category tax paid for such income as a credit to be offset against other taxes. In the case of the semi-integrated system, the company owners must pay taxes based on the effective withdrawals of profits that they make from the company. In this case, shareholders or community members have the right to credit 65% of the first category tax paid.
Additionally, the first category tax regime as a sole tax applicable to capital gains derived from the sale of shares or social rights is eliminated from 1 January 2017. As a general rule, under the new regime, capital gains derived from the alienation of shares or quotas from Chilean entities are subject to the general tax regime.
