On 31 January 2014, the Chilean government published in the official Gazette Law 20.727, which makes changes to the country’s foreign tax credit (FTC) rules.
The FTC amendments increase the availability of FTCs for indirectly owned foreign subsidiaries located in the same country. These amendments are to be applied to operations performed from calendar year 2014 onwards.
The changes increase the maximum FTC amount that taxpayers can use to reduce their Chilean tax, the amount of the credit depending on whether the income derives from a country with which Chile has an income tax treaty.
