LAW NO. 21,047 INCORPORATES VARIOUS MEASURES OF A TAX NATURE Having regard to the fact that the H. National Congress has given its approval to the following, Bill: " Article 1.-Enter the following amendments to the Law on Tax on the Income, contained in Article 1 of Decree Law No. 824, 1974: 1. In Article 10 (3) (c): (a) Replace the phrase 'countries or jurisdictions appearing in the list referred to in Article 41 (2)' by 'territories or jurisdictions which are regarded as a tax regime'; (b) Replace the expression "the country or jurisdiction listed" by the expression "one of these territories or jurisdictions". (c) Replace the phrase "a country or jurisdiction which is not part of the list referred to in Article 41 (2)" by "territory or jurisdiction which does not have a preferential tax regime in the terms laid down in Article 41 H". 2. Delete in point (a) of Article 14 (E) (E) the phrase 'included in the list set out in Article 41 D (2) or'. 3. Repeal Article 41 D. 4. Replace, in the third subparagraph of Article 41 (1) E, the phrase 'or territory incorporated in the list referred to in Article 41 D (2)' by ', territory or jurisdiction referred to in Article 41 H'. 5. In Article 41 F: (a) Remove the literal (i) from the numeral 6. (b) Replace in the second subparagraph of paragraph 13 the phrase "established, established, domiciled or resident in one of the territories or jurisdictions referred to in Article 41 D, or which that person or entity is understood" by the expression 'falling within'. 6. Replace in Article 41 (2) (C) (2) the sentence 'of those referred to in Articles 41 D, 2 and 41 H' by 'being regarded as a preferential tax regime in accordance with the rules laid down in Article 41 H'. 7. Replace in the first paragraph of Article 59 the sentence "forming part of the list referred to in Articles 41 D and 41 H" by "being regarded as a preferential tax regime in accordance with the rules laid down in Article 41 H". Article 2.-Replace in the second paragraph of the 18th article of the third transitional article of Law No. 20,780, a tax reform that modifies the income tax system and introduces various adjustments in the tax system, the Phrase "constituted, established, domiciled or resident in one of the territories or jurisdictions referred to in Article 41 D, or which such person or entity is understood" by the expression "falling within". Article 3.-Taxpayers who, in accordance with the rules of the Law on Income Tax, declare their effective income demonstrated by a balance sheet or are subject to the provisions of Article 14b (A) of that law, and that they make donations to the Episcopal Conference of Chile, on the occasion of the visit of the Pope, will be able to reduce as expenditure the sums of money donated, for the effects of the determination of the taxable liquid income affects to the taxes that provides for the application of the absolute limit of Article 10 of Law No 19,885, which encourages and rules the good use of donations that give rise to tax benefits and extends them to other social and public ends. If the donor records a tax loss, it may reduce the amount of the amount donated to 1.6% of the tax capital. Only the first donations accepted by the Episcopal Conference of Chile will benefit from the benefit set out in the previous paragraph until, as a whole, the maximum amount of $4,000,000,000 is found.-(4 billion pesos). The Episcopal Conference of Chile will certify this circumstance at the time of accepting each donation. In the first half of the year 2018, the Ministry of Finance must be fully accountable for the funds received and their destination. For its part, the Ministry of Finance will forward this information to the Chamber of Deputies and the Senate. The deduction as expense of the donations indicated will be made in the year in which the disbursement was actually incurred and must be credited with receipts subscribed by authorized representatives of the donor, in the form determined by the Internal Revenue Service. Donations that meet the requirements set forth in this article will not require the innuendo process and will be exempt from any tax. Article 4.-Reposition in the fourth transitional article of Law No. 20,899, which simplifies the system of taxation of income and perfects other tax laws, the expression "2017", the second time it appears, by the government "2019," and the expression "2019" by "2021." Article 5.-Incorporate in the Tax Code, contained in Decree Law No 830 of 1974, a new Article 62b of the following wording: " Article 6b.-In order to comply with international conventions dealing with trade information from financial institutions qualified as such in accordance with the agreements in force in our country, the Internal Revenue Service may require annually the information reserved meets the requirements laid down in this Article. The audited financial institutions, for their part, will have to apply the review and identification procedures set out in the respective regulation. For the purposes of the foregoing paragraph, the required information shall meet the following requirements: (a) Corresponding to the holders of financial accounts or controllers of such holders who are natural persons, legal persons or entities having a tax residence in another jurisdiction, assets left to the death of a person who at the time of death was a resident of another jurisdiction, or legal persons or entities that do not have a tax residence in Chile and whose effective administration takes place in another jurisdiction. (b) Versar on the balance or value of the financial accounts belonging to the holders or controllers referred to in (a) above, 31 December of each year or the date of closure of the accounts, income paid to such holders or drivers, and on the identity of these. (c) To be held by financial institutions qualified as such in accordance with an existing international convention which provides for the exchange of information on financial accounts. Financial institutions shall provide the Internal Revenue Service with the information specified in the preceding paragraph by 30 June of each year by the means established by the Service by resolution. For this purpose, financial institutions shall keep a record of the review procedures carried out to identify the financial accounts whose information is to be communicated to the Service. Such registration, together with the information that serves as a backup, shall be maintained for seven consecutive years, counted from the date on which the financial institution took knowledge and recorded the information required to comply with the the procedures referred to in this Article. In any event, the Service may not request information beyond the period mentioned above. Failure to comply with the obligation to execute the procedures for the review and identification of financial accounts, to deliver the information to the Service in a timely and complete manner, and to maintain the record previously noted by a financial institution, shall be punished with a fine equivalent to 1 annual tax unit for each of the accounts in respect of which any of the duties indicated are infringed. However, the total annual penalty payable by each institution may not exceed 500 annual tax units. The delivery of maliciously false information by the account holder or its controllers to the financial institution shall be sanctioned with the fine set out in the final paragraph of Article 97. The information that the Service will access in accordance with the provisions of this article may not be disclosed in any way and may only be used to comply with the purposes of exchange of information regulated in international conventions. in force for the exchange of information between tax authorities. The provisions of this article shall be applied and interpreted in accordance with the recommendations of the Organization for Economic Cooperation and Development or the United Nations. In no case shall such interpretations imply an extension of the scope of this article to natural or legal persons who have their tax residence in Chile. Article 6.-Intercalase in the first paragraph of Article 37 of Decree Law No. 1.939 of 1977, which establishes rules on the acquisition, administration and disposal of State goods, among the expressions "all manner of taxes" and " and not ", the following:" and shall have the quality of expenditure necessary to produce the income for the purposes of the Law on Income Tax, contained in Article 1 of Decree Law No. 824 of 1974. For their part, these donations shall not be subject to the absolute limit laid down in Article 10 of Law No 19,885. ' TRANSITIONAL PROVISIONS Article 1.-The elimination of Article 41 D of the Act on Income Tax, as provided for in Article 1 (3) of this Law, shall enter into force on 1 January 2022. Don't obstinate The foregoing, as from the date of publication of this law, may not enter new undertakings to the regime established in the rule of Article 41 D. Article 2.-The open public limited companies, the closed public limited companies and their shareholders which, at the date of publication of this law, are subject to the provisions of Article 41 D of the Law on Income Tax, shall be subject to the following provisions: 1. Open public limited liability companies and closed public limited liability companies covered by the provisions of Article 41 D to 31 December 2021 shall be incorporated into the general scheme of first class tax with partial deduction of credit in the final taxes laid down in Article 14 (B) of the Law on Income Tax, contained in Article 1 of Decree Law No. 824 of 1974, beginning in the commercial year 2022. Without prejudice to the provisions of the preceding subparagraph, such companies may be converted between 1 January and 2 May 2022 in a company eligible for the general scheme of first class tax with a total allocation of Credit in the final taxes provided for in Article 14 (A) of the Law on Income Tax, giving notice of the foregoing in the form and time period provided by the Internal Revenue Service by resolution. 2. Companies which are incorporated into the general scheme, without prejudice to Article 18 (2) of the Tax Code, shall bear full accounting in national currency. Where, pursuant to Article 41 (4) of the repealed Article 41 (4), the company carries its accounts in foreign currency and does not obtain authorization from the Internal Revenue Service to maintain it, it shall carry out the conversion to national currency at the exchange rate observed at 31 December of the year preceding the year of its incorporation into the general scheme. Likewise, they must replace the special register referred to in the provision mentioned in the general register provided for in Article 68 of the Tax Code, in the form established by the Internal Revenue Service by resolution. The conversion into national currency will produce effects on the tax result, according to the general rules. 3. For the purposes of incorporation into the system of taxation laid down in Article 14 (B) of the Law on Income Tax, open and closed public limited liability companies covered by Article 41 D shall determine at least 31% of the December 2021, where applicable, the background details referred to in point (a) of number 1 of the third transitional article of Law No 20,780, as amended by Law No 20,899. 4. For the purposes of informing the antecedents requested in point (a) of point (a), those who appear on the records which are currently obliged to bear the taxpayers subject to the provisions of the Article 41 D of the Law on Income Tax. 5. Taxpayers who are subject to the general scheme and the provisions of Article 14 (B) of the Law on Income Tax, to be counted on 1 January of the 2022 commercial year, shall apply, where appropriate, the rules (b) of the third transitional Article of Law No 20,780, as amended by Law No 20,899, as laid down in point (b) of No 1 and No 5, 6 and 9. 6. The distributions to be made on 1 January 2022 shall be charged in the form set out in point (c) of the first paragraph of Article 3 (1) of the transitional provisions of Law No 20,780, as amended by Law No 20,899, in addition, where applicable, the provisions of point (c) of point (c) of point (ii). Income which is outstanding for distribution to the respective shareholders at 31 December of the year preceding the year in which they are incorporated into the general scheme shall be entered in a special register, the form of which shall be established by the Internal taxes by resolution. When such income is distributed to shareholders without domicile or residence in Chile, they will not be affected by any tax and may be distributed to such shareholders at any time, without attending to the order of imputation established by the Law on Income Tax on the date of the distribution. If the same income is distributed to shareholders with domicile or residence in Chile, they will be affected by the general taxes of the Law on Income Tax, with the right to downgrade as credit the tax borne by the platform society. "business", on the income of national sources that they have obtained. For the purposes of calculating the said credit, the company must consider that the profits distributed, affected by the tax, correspond to all its shareholders in proportion to the existing ownership of the shareholders. resident or domiciled in Chile and non-residents or domiciled in the country. 8. Taxpayers who, after 1 January of the 2022 commercial year, opt to benefit from the scheme referred to in the second subparagraph of point (a) of this Article, shall apply, where appropriate, the rules laid down in the previous letters, except as regards the distributions to be counted from 1 January 2022, which shall be charged in the form set out in the number 1 (c) (i) of the number 1 of the transitional third article of the Law No 20,780, as amended by Law No 20,899. Article 3.-Article 3 of this law shall govern from the date of its publication in the Official Journal and until 15 January 2018. Article 4.-The provisions of this law which do not have a special rule of validity, in accordance with the preceding articles, shall enter into force on the first day of the month following that of their publication. " And because I have had to approve and sanction it; therefore, promulgate and take effect as the Law of the Republic. Santiago, 13 November 2017.-MICHELLE BACHELET, President of the Republic.-Nicolas Eyzaguirre Guzmán, Minister of Finance.-Nivia Palma Manriquez, Minister of National Assets. What I transcribe to you for your knowledge.-Saluda Atté. to you, Macarena Lobos Palacios, Deputy Finance Secretary.