Chile Tax Agency Clarifies Taxation of Capital Gains on Share Contributions Under DTA With Spain

The Chilean Internal Revenue Service Nov. 19 issued Letter No. 2399, clarifying the taxation of capital gains on share contributions. The taxpayer, the sole owner of a Chilean company, was tax resident in Spain and planned to transfer shares in the company to purchase shares of a Spanish company. The taxpayer sought clarification regarding whether the 16 percent reduced capital gains tax rate under the Chile-Spain DTA applied. Upon review, the Tax Agency clarified that: 1) under the DTA, the 16 percent reduced rate applies to gains obtained by a resident of one contracting state transferring shares in a company ...