On 23 August 2019, the tax reform Bill was passed by the Chamber of Deputies. The tax changes in the reform bill include:
- a new definition of permanent establishments
- a new concept for tax deductible expenses;
- the introduction of green taxes; and
- a 19% VAT rate to be applied to digital services rendered in Chile by non-residents.
Further, the bill will introduce a new simplified tax regime for micro, small, and medium sized enterprises, including simplified accounting and eased tax filing requirements.
Finally, the bill would introduce new environmental taxes and reform the country’s corporate tax framework, including by modifying the general anti-avoidance rule (GAAR) and implementing the OECD’s base erosion and profit shifting recommendations in the area of preventing permanent establishment avoidance.
It is expected that the tax reform bill will be adopted before the end of 2019.
