Chile Tax Agency Clarifies Pro-Pyme Regime Taxation of Income From Promise-to-Sell Real Estate Contracts

The Chilean Internal Revenue Service May 4 issued Letter No. 1339, clarifying the taxation of income derived from promise-to-sell real estate contracts under the Pro-Pyme Regime for small- and medium-sized enterprises (SMEs). The taxpayer sought clarification as to whether such income under the regime is included in the gross income of the year during which the corresponding sales contract is signed. The Tax Agency clarified that a special income recognition rule applies under the regime to require the inclusion of income from such promise-to-sell real contracts, in the tax base of the financial year in which it’s earned. [Chile, Internal ...