Chile wt/tpr/S/220 Page
Other Measures Affecting Production and Trade
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Other Measures Affecting Production and TradeEstablishment and taxation of enterprisesA trading enterprise can be set up in Chile in several legal forms: a public limited company; a limited liability company; a general partnership; a limited partnership; a joint stock company; an individual limited liability company; an individual business and an association or joint venture. The most common forms for a trading company are a public limited company or a limited liability company. Law No. 18.046 of 1981 (amended in 1999) provides that a public limited company is a legal person composed of shareholders who pool their capital and whose liability is limited to the amount of their individual contributions. There are two types of public limited company: open and closed. The former are companies that meet one of the following criteria: their shares are offered for sale to the public and quoted on the stock exchange; they have 500 or more shareholders or at least 10 per cent of the paid-up capital belongs to over 100 shareholders. All other public limited companies are deemed to be closed. Open public limited companies are subject to inspection by the Superintendencia de Valores y Seguros (Supervisory Authority for Securities and Insurance) and must be registered in the National Securities Register.127 In the case of a limited liability company, the liability of each partner is limited to the amount of capital it has paid in or to a larger amount if this is specified in the company's articles of incorporation. There is no minimum capital requirement for setting up such a company; it may have two to 50 partners, but if this amount is exceeded it becomes a general partnership. Foreign companies can operate in Chile through a representative, agency or subsidiary, or set up in Chile in one of the aforementioned legal forms. Companies are set up by means of public articles of incorporation. An extract from these must be registered in the Commercial Register for the place where the company is domiciled and must be published in Chile's Official Journal. Both the registration and the publication must take place within 60 days from the date of incorporation. Notarial and registration fees depend on the company's level of taxation, but normally represent some 2 per cent of the capital. Following registration in the Commercial Register, the company set up must complete the following formalities: register in the Registro Rol Único Tributario ‑ RUT (Taxpayers' Register) at the Unidad del Servicio de Impuestos Internos ‑ SII (Internal Taxation Service Unit) of the place where the person concerned has his domicile and notify this Unit of the commencement of activities; await verification of the domicile by the SII in order to obtain authorization for the taxation documentation and the books of account, or, in the case of electronic documentation, obtain authorization from the SII; obtain a business licence from the competent municipal authorities; register for social security against occupational accidents and diseases; and, where applicable, obtain sanitary authorization from the competent health service. Depending on the type of activity, other authorizations may be required from the competent government services. A World Bank study of competitiveness indicators shows that, in 2008, an average of 27 days was required to set up a company or business in Chile, at an average cost equivalent to 7.5 per cent of per capita gross national income.128 Although Chile is still the leading country in Latin America as regards the competitiveness of its regulatory business framework, its position in the international ranking drawn up by the World Bank has fallen in recent years, putting it in 40th place (out of a total of 181 countries) in 2008.129 In Chile, tax is levied at the national level and there are no significant municipal, provincial or regional taxes, except for the business licence. The main taxes on companies are income tax (which includes a tax on dividends), the tax on royalty payments, the tax on interest, and property tax. The income of companies set up in Chile is subject to income tax, irrespective of the source of the income. Subsidiaries of foreign companies only pay income tax on their income from Chilean sources. Services supplied abroad to a Chilean resident are taxed. Pursuant to the Income Tax Law130, "capital income" (as distinct from "earned income") is subject to first category tax, which is imposed on companies whose income comes from industry, trade, mining, property or other activities that involve the use of capital. Since 2004, the first category tax has been levied at a flat rate of 17 per cent. This tax is chargeable against the supplementary overall tax or the additional tax, as applicable. The supplementary overall tax is a graduated tax (ranging from 0 to 40 per cent) applied to all income of natural persons resident in Chile. The additional tax, whose general rate is 35 per cent, is imposed on the capital income from Chilean sources of natural or legal persons not resident in Chile. This tax applies to the profits earned by companies which have non-resident shareholders or partners when these profits are withdrawn, distributed as dividends or remitted abroad. In general terms, foreign companies operating in Chile are subject to the first category tax (17 per cent) and the additional tax (35 per cent) on the amount of the profits distributed or remitted abroad, but they are entitled to a credit of 17 per cent against the additional tax. Alternatively, foreign companies which invest under DL No. 600 may opt for a clause that allows them to pay a flat tax rate of 42 per cent for a period of 10 years (which may be extended up to 20 years for projects exceeding US$50 million, see also Chapter II(3)). Since January 2006, there has been a special tax on mining ("mining royalty") which is added to income tax (see Chapter IV(4)). Pursuant to tax legislation, all royalties paid abroad are subject to a withholding tax of 30 per cent, except for payments to persons residing in countries with which Chile has signed agreements to avoid double taxation (see Chapter II(3)(ii)). Since January 2007, some royalties have benefited from a reduced rate of 15 per cent, for example, royalties related to the use of patents, utility models, industrial designs, layout designs of integrated circuits, new plant varieties and computer programs. In general, interest on loans taken out abroad is subject to a withholding tax of 35 per cent; however, if the interest is paid to foreign banks or financial institutions, the rate is 4 per cent. There is a 1.2 per cent land tax on non-agricultural real estate based on valuation of the property and the amount collected goes to the municipal authorities. A surcharge of 100 per cent on the rate in effect applies if the property is located in urban areas on non-built-up sites or has been abandoned. A number of transactions and documents are subject to a stamp tax. These include cheques, transfers or payments connected with payment orders, charges or transfers from current accounts in banks, as well as loans of money and documents covering loan transactions such as bills of exchange and issue of bonds. The stamp tax was temporarily discontinued in 2009 for all loan transactions and its reduction to 0.6 per cent of the capital has been announced for the first half of 2010.131 Directory: ctyindex ctyindex -> Honduras wt/tpr/S/120 Page ctyindex -> Belize wt/tpr/S/134 Page ctyindex -> Brazil wt/tpr/S/140 Page ctyindex -> Dominica wt/tpr/G/85/dma page ctyindex -> Mexico wt/tpr/S/97 Page Download 0.49 Mb. Share with your friends:
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