Chile’s tax administration published Circular Letter 11/2025 on 30 January 2025, which introduced Law 21.713, regarding controlled foreign company (CFC) regulations, preferential tax regimes, and the indirect sale of assets in Chile.
The Law went into force the same day.
The Circular introduces the following key provisions:
Changes to preferential tax jurisdiction sales
Article 10, section 3 of the Income Tax Law (ITL) was amended to include the sale of entities in preferential tax jurisdictions with assets in Chile. This applies when Chilean residents directly or indirectly participate in the entity and hold at least 5% of its capital or social rights. The change takes effect on 1 November 2024.
Amendments to CFC rules
Changes to the CFC rules include a revised definition of “related parties,” which will now be based on the Tax Code instead of stock market regulations. The new rule adds relationships such as married couples and certain relatives. It also introduces a new exclusion rule where taxpayers don’t need to include income from a CFC if it is under 2,400 tax units. These provisions take effect on 1 January 2025.
New definition of preferential tax regimes
Clarifications have been provided on the jurisdictions considered a “preferential tax regime” replacing the “no or low taxation regime” concept. Under the new rule, two conditions must be met for a jurisdiction to qualify:
- No effective exchange-of-information agreement with Chile;
- Not being rated compliant or largely compliant with tax transparency and exchange of information standards by the OECD’s Global Forum. The new definition takes effect on 1 January 2025.
