According to Oficio No. 1763/2024, a payer in Chile may refrain from withholding tax, or withhold tax at a reduced rate, on income paid to a US resident entity under the Chile-US income tax treaty.
This applies only after the US recipient submits both the certificate of tax residency required by the treaty and the sworn statement under Resolution Ex. No. 58 of 2021, confirming the absence of a permanent establishment (PE) in Chile. The US recipient should also meet all the required criteria to benefit from the treaty.
Regarding the additional tax withheld prior to the submission of the certificate and sworn statements required by Ex. Resolution No. 58 of 2021, the following information is provided:
- The additional tax applies to individuals without domicile or residence in Chile, with respect to income subject to that tax. The taxpayer of the additional tax is the income beneficiary (BBB).
- The obligation to withhold the additional tax by the income payer aims to prevent or ensure compliance with the tax obligations that fall on the income earned by individuals without domicile or residence in Chile.
