Chile Tax Agency Clarifies Deductibility of Company Expenses Paid by Partners, Shareholders

The Chilean Internal Revenue Service April 29 issued Letter No. 1444, clarifying the tax deductibility of company expenses paid by partners or shareholders. A taxpayer sought clarification as to whether specified small and medium enterprises (SMEs) are eligible to deduct company expenses which were paid by partners of the company, for which the company incurred a debt. The tax agency clarified that to the extent these payments related to the disbursement of purchases, imports, the provision of services, compensation, fees, interest, and taxes other than income taxes, the payments are deductible. [Chile, Internal Revenue Service, 04/29/22]

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