Chile Tax Agency Clarifies Tax Treatment of Voluntary Pension, Deposit Payments to Partners, Shareholders

The Chilean Internal Revenue Service April 29 issued Letter No. 1442, clarifying the tax treatment of voluntary pension and deposit payments made to partners, shareholders, and individual entrepreneurs. A taxpayer sought clarification as to whether the mandatory contributions of voluntary pensions and deposit payments to partners, shareholders, and individual entrepreneurs could be deducted from the tax base under the single category tax system and treated as an expense. The tax agency clarified that: 1) taxpayers who actually work in the company may deduct the mandatory contributions of voluntary pensions, up to 50 account units (UF) per month; and 2) the ...