Article 1.-Introducense the following amendments to the income tax Act, contained in article 1 of Decree Law No. 824, 1974: 1) modify article 41 A in the following manner: to) the letter a. of this article shall be replaced by the following: "a. dividends and withdrawals of utilities.
Taxpayers who receive dividends or make withdrawals of profits of companies incorporated abroad, should consider the following rules for the purposes of applying to these income taxes of this law: 1. total credit available.
The tax will entitle to credit income that have had to pay, or who has had withheld them abroad by received dividends or withdrawals of utilities made societies, in its equivalent in pesos and readjusted as indicated in number 1-letter D following.
In the event the country source of dividends or withdrawals of social utilities there is withholding income tax, or this is less than the first category of Chile tax, the tax paid by the income of the company abroad may deduct as a credit. This tax shall be considered proportionately in relation to dividends or withdrawals of earnings received in Chile, which will recompose gross based on income proportionally corresponding to dividends or profit at the level of the company from which they are paid, adding the withholding tax and the tax income of the respective company.
In the same situation before, also entitle to credit the income tax paid by a partnership on the part of the utilities that distribute the company that shipment such utilities to Chile, always that both are domiciled in the same country and the second directly owns 10% or more of the capital of the first.
2.-for each income credit will be the lesser amount between: a) the tax paid to the foreign State on the respective income as set out in the previous number, and b) 30% of such an amount, to subtract the 30%, the resulting amount is the net amount of the perceived income for which the credit is calculated.
The sum of all the credits determined according to these rules, shall constitute the total available credit of the taxpayer for the respective year.
Total available credit will be deducted from the global premium and final taxes, tax supplementary and additional, in the form indicated in the numbers that follow.
3 credit against the first category tax.
En_el_caso_de the first category tax, the respective credit will be calculated and applied according to the following rules: a) is added to the base of the first category tax available total credit determined under the rules of the number 2-above.
(b) of the first category tax deductible credit will be equal to the amount resulting from applied the rate of this tax on the sum of the total credit available over the respective foreign incomes.
4. credit against final tax.
The amount resulting after subtracting the total credit available the credit of first category determined pursuant to the preceding paragraph, shall constitute the credit against final taxes, which may deduct supplementary or additional, global tax according to the following rules: a) in the event that foreign source income that are entitled to the credit that is this article have been obtained by taxpayers forced to determine your liquid taxable income according to full accounting (, the following rules shall apply: i) against the final tax credit score separately in the register of the Fund's taxable profits corresponding to the year in which obtained foreign source income that originates such credit.
The credit thus registered or your balance, shall be adjusted in accordance with the variation of the price index the consumer between the last day of the month prior to the end of the year in which they originated and the last day of the month prior to the end of each year, or until the last day of the month prior to the retention in the case of the additional tax subject to this modality.
(ii) the credit against taxes late in the above form will be considered distributed to shareholders, partners or individual entrepreneurs, together with distributions or withdrawals of utilities that must be attributed to taxable earnings for the year in which such credit has been generated. To this effect, the distribution of the credit shall be made proportionally according to the percentage that represents the number of the respective dividend or removal of utilities attributable to the year in question with respect to the total of proceeds derived in that year.
(iii) if in the year in which occurs the credit the taxpayer losses, such credit shall terminate completely. If the losses from future periods absorbed earnings for the year in which the credit is generated, this also shall terminate by applying the literal II) precedent, when appropriate, without the right to return.
(iv) if the profits or dividends originating credit against taxes late distribution are, in turn, perceived by other taxpayers forced to determine your taxable liquid income according to full accounting, these taxpayers should apply the same standards of this number.
((b) when incomes that are entitled to this credit are distributed, withdrawn, or be considered payable, the following rules shall apply by taxpayers of additional or supplementary Global tax,: i) against final tax credit will be added to the basis of complementary or additional global tax, properly reset. As regards the additional withholding tax, will also apply reset which proceed by the variation of the price index to the consumer that occurred between the last day of the month prior to the retention and the last day of the month prior to the closing of the exercise which corresponds to the respective annual statement, and ii) the referral credit will be deducted from the global complementary or additional tax determined subsequent to any other credit or deduction authorized by law. If there were a remnant of credit, this will not refund or imputation to other taxes or may recover in the aftermath. "."
(((b) modify the letter B-in the following way: i) Insert, in the second paragraph of the number 1.-, the expression "as described in number 1.-of the letter D-following," between the words "national" and "according to", and removed the term "established in article 41, number 5," between the words "change" and "existing", and ii) replace, in the number 2-letter B. , the word "considered" by the word "considered".
(c) add the following letter C-, becoming the current letter C-letter D.
"C revenue from abroad by the use of trademarks, patents, formulas, technical advisories and other similar benefits.
Taxpayers who receive the foreign income by the use of trademarks, patents, formulas, technical advisories and other post-retirement benefits, should consider the following rules for the effects of applying the first category tax such income: 1. Add liquid first category tax taxable income an amount determined in the manner indicated in number 2.-next equivalent to taxes which have had to pay or which has had withheld them abroad for income received by use of trademarks, patents, formulas, technical advisories and other benefits similar to that referred to in this letter, converted to its equivalent in pesos and reset in the manner provided in the number 1-letter D-following. For these purposes, the exchange rate corresponding to the date of the perception of the income shall be considered.
The quantity indicated in the preceding paragraph shall not exceed the credit that is set to the next number.
2. taxpayers referred to in this letter shall have the right to a credit equal to the result of applying the tax rate of first category on such an amount, to deduct the credit of that amount, the outcome results in an amount equal to the sum of liquid income for use of trademarks, patents, formulas, technical advisories and other similar benefits perceived from the outside converted to its equivalent in pesos and readjusted in the manner provided in the number 1-letter D-following. In any case, the credit may not exceed the tax actually paid or withheld abroad, properly reset.
3. the credit determined in accordance with the preceding rules, shall be deducted from the first category tax payable by the taxpayer for the corresponding year. This credit will be applied then those credits or deductions that do not give right to refund and before those that allow it.
4. the surplus of credit defined in previous issues, will fall in the same form to the first category of the next and subsequent exercise tax. To this effect, the remnants of credit must be reset according to the variation of the price index consumer between the last day of the month preceding the term for the year in which occurs the remnants, and the last day of the month prior to the closing of the following or subsequent financial year. The remnants of credit may not be attributed to any other tax or is entitled to its return. "."
((d) Introducense, in the letter c.-, which has become a D-, the following modifications: i) replaced the number 1-with the following: "1.-for the calculation of the credit for foreign taxes, both respective taxes as dividends, withdrawals and income from abroad will be converted to its equivalent in Chilean pesos according to the exchange rate between the national currency and the corresponding foreign currency , according to information published by the Central Bank of Chile in accordance with the provisions in number 6 of chapter I of the compendium of rules of international changes. If the foreign currency in which payment has been made is not one of those informed by the Central Bank, tax paid abroad in such currency must first be calculated in its equivalent in dollars of the United States of America, according to the parity between both coins showing in the form and term that establishes the internal revenue service through resolution later becoming to the equivalent in Chilean pesos in the manner already indicated. In the absence of special rule, for purposes of establishing the applicable rate of Exchange, the value of the respective currencies shall be deemed on the day which has been received or accrued, as appropriate, the respective income. "."
(ii) Intercalanse, in the first sentence of the number 2-, the expressions "A-and B-" between the words "letters" and "previous".
(iii) Reemplazanse, in the number 3-, the expressions "income taxes" by "mandatory income tax", the expressions "retained abroad" by "withheld, definitively, on the outside,"; and the expressions "or substitute them, whether they apply on certain results actual revenue or income alleged" by "as is that they apply on certain results actual revenue or income alleged substitute them". In addition, added the following sentence following the separate dot (.), that happens to be followed: "If the application or amount of the foreign tax in the respective country depends on its admission as a credit against the tax income levied in the country of residence to the investor, such a tax does not entitle to credit.".
(iv) Reemplazanse, at number 5.-, the expressions "letters A and B above" by "a.-, B- and c letters above".
(v) add a new number 6.-, read as follows: "6.-without prejudice to the previous rules, total credit for foreign taxes to foreign source income paid or payable in the year, as appropriate, may not exceed the equivalent of 30% of the net income of foreign source of exercise." For these effects, net income of foreign source of each year shall be determined as the result of consolidated utility or loss of supply affects tax in Chile, foreign, obtained by the taxpayer deducted costs necessary to produce it, in the proportion that corresponds, most all of the credit for foreign taxes, calculated in the manner established in the preceding article. "."
((2) amending article 41 B in the following way: to) Reemplazanse, in the second sentence of the first subparagraph, the expressions "of the letter C" by the expressions "of the letter D"..
(b) replace entirely the last sentence of the first subparagraph by the following: "In cases in which has been appropriately made the registry or can not be the aforementioned documentation, the reduction or withdrawal of capital must register through relevant documentation, duly authenticated, when applicable, in the manner and within the period established by resolution internal tax service.".
(c) Reemplazanse, in the last sentence of the first paragraph of the number 1-, the expressions "article 41, no. 5" by the expressions "number 1.-of the letter D-article 41 A".
(d) replace the second sentence of the number 4. by the following: "To determine from income from the alienation of shares and social rights, taxpayers subject to the regime of monetary correction assets and liabilities deducted the value which are registered these assets at the beginning of the exercise, increase or decrease it previously with new investments or withdrawals of capital.".
(e) Reemplazanse, in the third sentence of the number 4.-, the expressions "to the regime of monetary correction assets and liabilities", by the expressions "under that procedure".
(f) Reemplazanse, in the final sentence of the number 4.-, the expressions "same letter A number 1-" by the expressions "resulting from applying the number 1-letter D-".
((3) amended article 41 C in the following way: a) disposed of the expression "A. total credit available", as well as B-and C-, entirely, and replaced the expression "D.-credit in the case of personal services" by the expression "3.-credit in the case of personal services.".
(b) Insert the following after the expression "1-" in the first clause of the paragraph 1., passing the text currently following such an expression, composed of three subparagraphs, to entirely replace the numeral 2-content, keeping the place in the numbering: "shall be entitled to credit, calculated under the terms described in the letter a. of article 41 A , all foreign income taxes paid under the laws of a country with an agreement to avoid double taxation force with Chile, in accordance with the stipulated by the agreement. "."
(c) delete, in the third paragraph of the text that has become the new paragraph 2., the two final sentences.
(d) replace the final paragraph of the new number 3.-by the following: "in the determination of the credit which is authorized in this issue, shall apply to the numbers 1, 3, 4, 5 and 6 letter D-article 41 A.".
(4) replaced, in number 5 of article 41 D, the expressions "B-and C-article 41 C of this law" by the expressions "the numbers 2-, 3- and 4-letter a. of article 41 of this law".
(5) Reemplazanse, at number 3 of article 69, the expressions "and in the first paragraph of the letter A" expressions "and in paragraphs first letters a. and C.-".
(6) Reemplazanse, in the final paragraph of article 84, the expressions "A and B" by the expressions "A-, B- and C".