Whether you have recently commenced operations in Chile or have been operating in the region for sometime, there are a number of important considerations we recommend all companies take into account.
The first is to ensure that your company’s corporate compliance is up to date, including holding shareholders’ meetings and board of directors’ meetings. The frequency of such meetings will be determined by your company bylaws.
We also recommend that companies put in place an inter company loan / umbrella agreement. This is of benefit when repatriating funds to your parent company and also assists when complying with transfer pricing rules.
Likewise, we recommend that a promissory note to prepare when funds enter Chile from a foreign account, effectively leaving a paper trail of the loan.
You should also bear in mind that if your employees are providing services in Chile, an inter company service agreement should be in place in case of an audit by the Chilean Taxation Office. This will also assist your company to comply with transfer pricing legislation. In addition, if your company using intellectual property owned in Australia or internationally, we recommend that an intellectual property licensing agreement be put in place.
We confirm that the Double Taxation Agreement between Chile and Australia will be implemented (from a Chilean perspective) from 1 January 2014. You should certainly ensurethat you are aware of the changes and how they will affect your company’s operations.
Finally, all Chilean companies that perform transactions with related parties abroad must file an affidavit with the Chilean Taxation Office (Servicio de Impuestos Internos orSII).
In line with OECD requirements, new legislation requires that taxpayers provide precise information on, amongst other things, the type of transactions carried on with foreign related parties, their results, and the method used to define the transfer prices (which must beone of the methods authorised by law). Failure to submit this affidavit (or if it is incomplete or erroneous) may attract fines of up to US$48,000. The affidavit must be filed prior to 30 June annually and contain all transactions carried on during the previous year with related parties.
Please contact our office for further information on how we can assist your company on the above matters.
Av.Vitacura 5250, Oficina 802
Codigo Postal / Zip Code:7630225 Vitacura,
T: +56 2 2242 1157
Carrera 13a N° 86a 54/56 Of.201
Edificio Park Office 86
T: +57 1 381 6839