Chile Tax Agency Clarifies Recognition of Income, Formation of PE Under DTA, Protocol With Peru

The Chilean Internal Revenue Service Jan. 12 issued Letter No. 137, clarifying the recognition of income obtained through a branch under the 2001 DTA and 2002 protocol with Peru. The taxpayer, a Chilean company, owned 99.99 percent of the shares of a Peruvian company, with the remaining percentage belonging to an indirect owner of the Chilean company. The managerial and operational decisions are carried out by the same general manager for both the Chilean and Peruvian companies. The taxpayer sought clarification as to the recognition of its income in Chile and Peru. The Tax Agency clarified that: 1) a subsidiary ...