Chile Tax Agency Clarifies Early VAT Refunds of Credits From Fixed Assets for Pro-SME Companies

The Chilean Internal Revenue Service May 13 issued Letter No. 1127, clarifying the Sales and Service Tax Law (LIVS) mechanism allowing first-category taxpayers early refunds of VAT credits arising from fixed asset acquisitions. The taxpayer, a company under the general pro-small and medium-sized entity (SME) regime, sought clarification on applying the mechanism. The Tax Agency clarified that: 1) under the Income Tax Law (LIR), pro-SME regime companies can immediately and fully depreciate physical assets classified as fixed assets in the fiscal year of acquisition or manufacture, if they form part of the company’s fixed assets and correlate to a sum ...