Skip to content
Comply Exchange Logo Light Version

|

U.S. & Chile Income Tax Treaty Update

The Chile income tax treaty was approved in the U.S. Senate on June 22, 2023, and President Biden signed the instrument of ratification in December. For taxes withheld at source, the treaty will have effect for amounts paid or credited on or after February 1, 2024. For all other taxes, the Chile tax treaty will have effect for the taxable periods beginning on or after January 1, 2024.

The Announcement reads as follows:

The U.S. Department of the Treasury today announced the entry into force of a comprehensive income tax treaty between the United States and Chile. The Chile tax treaty is the first new comprehensive bilateral tax treaty signed by the United States to enter into force in over ten years. The Chile tax treaty will reduce tax-related barriers to cross-border investments between the United States and Chile and is only the second U.S. comprehensive bilateral tax treaty in force with a South American country. The Chile tax treaty was approved by an overwhelming majority in the U.S. Senate on June 22, 2023, and President Biden signed the instrument of ratification in December. The treaty entered into force today when the United States notified Chile that it had satisfied its applicable procedures for bringing the treaty into force.

Provisions in the Chile tax treaty include:

  • Reduced source-country withholding tax on certain payments of dividends as well as payments of interest and royalties.
  • A prohibition against source-country taxation of business profits of an enterprise in the absence of a so-called “permanent establishment.”
  • Beneficial rules for individuals, including provisions that govern the taxation of income from employment, payments to students and trainees, and pensions and social security payments.
  • A comprehensive limitation on benefits provision.
  • A comprehensive provision allowing for full exchange of information between the U.S. and Chilean tax authorities.

With respect to taxes withheld at source, the Chile tax treaty will have effect for amounts paid or credited on or after February 1, 2024. For all other taxes, the Chile tax treaty will have effect for taxable periods beginning on or after January 1, 2024.”

For full details read the Press Release & Treaty link below:

Press Release: https://home.treasury.gov/news/press-releases/

Treaty: https://home.treasury.gov/system/files/131/Treaty-Chile-2-4-2010.pdf

Make sure to follow Comply Exchange for more industry updates and subscribe to the Comply Connect for a full industry round-up at the end of each month!

U.S. & Chile Income Tax Treaty Update - Thumbnail

This document contains general information only and is not a substitute for accounting, tax, or any other professional advice or services. The information provided is considered accurate at the time of publishing and will not be updated with new regulation requirements.

Form 1099-K: IRS Updates to FAQ’s

Join our mailing list!

Receive a free comprehensive reporting whitepaper on signup.

Thank You!

Download your free reporting whitepaper.

Thank you

Download your free reporting whitepaper.