Chilean Tax Agency Clarifies Taxation of Advisory Services to Nonresident Companies

• Chilean Internal Revenue Service issued a letter clarifying taxation of advisory services provided to a nonresident company under the 2021 DTA with the Netherlands.
• The taxpayer, a Chilean investment company, provided financial advisory services to a Dutch bank.
• The taxpayer sought confirmation regarding the tax exemption of the services under the DTA and whether payments were subject to VAT.
• The Tax Agency clarified that the services were not a commission but financial advice.
• Payments for professional or technical services are taxed at a 15 percent rate.
• The Dutch bank is subject to Chilean tax only for income attributable to a permanent establishment in Chile.
• The taxpayer must issue invoices and pay VAT for the services used in Chile.

Source: news.bloombergtax.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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