On 31 July 2020, the Chilean tax Authority (SII) published a Letter Ruling No. 1475 of 31 July 2020, which addresses whether interest payments on a loan agreement concluded in 2014 between a Chilean resident company and a non-resident related party would be subject to the thin capitalization rules. This was introduced as Chile’s 2014 tax reform. It also clarifies that the interest payments would not be subject to the thin capitalization rules unless the loan agreement has been substantially modified from 1 January 2015.
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