The Internal Revenue Service has issued Resolution No. 48 along with instructions on 25th May 2015 regarding the contents of a confirmed statement to be requested by a Chilean payer from a beneficiary resident in a tax treaty country due to apply for treaty facilities. Article 74 of the Income Tax Law gives that when there exists a tax treaty, a withholding agent in Chile didn’t withhold or to withhold the related quantity at a reduced rate, if the given conditions are fulfilled:
- The income or amount paid is covered by a tax treaty.
- Need to prove the place of residence by the income beneficiary to the withholding agent with the help of making a certificate issued by the Competent Authority of the other Contracting State.
- The income beneficiary offers a sworn statement to the withholding agent declaring that it does not have a permanent establishment in Chile to which such income may be accredited and it is a capable resident in the other Contracting State, if it is required by the treaty.
