The Internal Revenue Service (Servicio de Impuestos Internos – SII) of Chile published a Resolution No. 124 of December 19, 2017 regarding list of jurisdictions that are considered to have a preferential tax regime or zero or low taxation. The list contains 153 jurisdictions. It aims to provide certainty and facilitate the correct voluntary tax compliance of taxpayers, contemplating additionally the possibility of knowing and receiving the doubts, observations and recommendations of the different stakeholders.
In accordance with the Resolution, any territory or jurisdiction has a preferential tax regime if it verifies the concurrence of at least two of a total of six requirements expressly stated, given that they are not member countries of the Organization for Economic Cooperation and Development (OECD).
The list is also related to a number of Chile’s tax rules, including increased reporting requirements according to foreign investments in listed jurisdictions and increased sanctions for failing to complete report, interest payment of beneficiaries, who domiciled, resident, or established in listed jurisdictions are deemed related for the purpose of thin cap rules, entities who are also domiciled, resident, or established in listed jurisdictions are deemed controlled for the purpose of CFC rules and increased withholding payments are applied to royalty payments to domiciled or resident persons in listed jurisdictions.
