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. Â 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.
