On 19 April 2023, Circular No. 19 was released by the Chilean tax authority. This circular modifies Circular No. 13, which was published on 18 March 2022, which provides guidance on the Mutual Agreement Procedures (MAP) under Chile’s tax treaties. The new Circular No. 19 amends the guidance related to the time limit of three years to submit MAP requests under Article 126 of the Chilean Tax Code.
Specifically, it clarifies that the three-year time limit commences from the first business day following the initial notification of an action that results in taxation not in line with the applicable tax treaty’s provisions. This is particularly relevant for cases involving transfer pricing, profit allocation to a permanent establishment, and refund requests. Moreover, the circular emphasizes that when the relevant tax treaty specifies the rules for calculating time limits, those rules must be followed.
