Chile Tax Agency Clarifies Taxation of Withdrawal of Voluntary Pension Savings Funds by Nonresident

The Chilean Internal Revenue Service April 19 issued Letter No. 1322, clarifying the taxation of the withdrawal of voluntary pension savings funds by a nonresident taxpayer. Prior to moving to the U.S., the taxpayer made voluntary pension contributions (APV) to a Chilean pension plan. After ending his employment and moving to the U.S., he sought to make a pre-retirement transfer of the funds to his U.S. pension system. The taxpayer sought clarification as to whether the single withdrawal tax formula applied. The tax agency clarified that: 1) the APV withdrawal was subject to a 15 percent withholding that served as ...