Chile’s tax authority (SII) issued Letter Ruling No. 711 on 10 April 2025 regarding the taxation of payments for technical services under the 2007 Chile-Colombia tax treaty.
The letter addresses two Colombians providing remote software development services to a Chilean company without an employment relationship. It confirms that payments for these services are subject to a 15% withholding tax under domestic law if classified as technical services under Article 12 (Royalties) of the 2007 tax treaty. According to Article 12, royalties include payments concerning technical assistance, services, and consulting, which are subject to a 10% withholding tax provided the individuals are Colombian residents.
The letter also noted that the competent authorities of Chile and Colombia agreed on the interpretation and application of the MFN clause in the treaty’s final protocol, specifically related to Article 12.
The authorities have decided to discontinue this procedure, leaving the scope of royalties under the treaty unchanged.
