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Plan and Measures to Promote Productivity & Investment
The new bill aiming for modernisation of public gestion and Productivity & Investment support had been accepted by the Chamber of Deputies, on Thursday 25th January 2018.
Some of the most relevant propositions about tax matters are:
- It will be considered as non-constitutive of income the highest value obtained in handovers of public debt instruments. Art. 104RIL, even if these transactions are made immediately after the purchase, without the need to spend a period between the date of purchase and sale.
- Improve the procedures for foreign investors to access the current VAT exemption on the importation of capital goods for investment projects in Chile and to eliminate business continuity requirements such as the duration of non-production of income. This also applies to local investors.
- Improve the procedures for the current early repayment of export VAT in the case of investment projects. Improvements to the system of early recovery of VAT invoiced when acquiring goods or services for export.
- In addition, an enterprise created or subsisting after a reorganization process may enjoy this early recovery benefit even if the owner of the enterprise would have been an entity that ceased to exist as a result of the reorganization, if is the created or surviving entity that performs the export engaged in the investment project.
- The tax residence certificate issued by the competent authority shall be valid in Chile throughout the commercial year in which it is issued, giving greater certainty to taxpayers.
- With respect to derivative contracts, a difference is incorporated in the non-fulfillment of the sworn affidavit presentations. If the bill is approved, in cases where the error originates in the fact that they were not communicated in time or contain inaccurate or incomplete information (without fraud or malicious intent) statements of rectification may be submitted, so that the sanction of the impossibility of reducing losses or expenses from undeclared derivatives will not be immediately applied.
Mr. Erlbaun is a lawyer in charge of the Tax Area at Cuevas Abogados (since 2016). He worked at Ernst & Young as a lawyer in charge of Litigations and Disputes resolution (2011-2016). He also worked at the IRS as a lawyer in the financial group of the Dirección de Grandes Contribuyentes (2009-2011). He final worked at Deloitte as a lawyer in the International Tax department (2007-2009).
Mr. Erlbaun also contributes as Assistant professor in the Pontificia Universidad Católica de Chile, in the course “Defense of the taxpayer” of the “Magister en Derecho UC” program, mention in Tax Law (2012) as well as Updates in tax matters for Tax Courtrooms and Customs offices (2013).