The Chilean tax authority (Servicio de Impuestos Internos - SII) has published Resolution No. 119 of 28 September 2020, which establishes new reporting requirements in relation to the alienation of foreign entities with underlying assets in Chile (indirect transfers). Resolution No. 119 of 2020 updates and replaces Resolution No. 65 of 2015 on the submission of the declaration in Form 1921.
One of the main changes is in regard to the parties required to submit the declaration. Under Resolution No. 65 of 2015, only the seller is required to submit the declaration if the other parties involved agree on the information included in the declaration. Under Resolution No. 119 of 2020, the declaration must be submitted by both the seller and the acquirer of a foreign entity directly or indirectly owning underlying assets in Chile. Further, the obligation to submit the declaration applies to any company, fund, or entity resident in Chile, or permanent establishment located in the country, that is an issuer or is part of the underlying assets located in Chile. It is also provided that the obligation to report is not restricted to operations that generate taxable events and must be fulfilled whenever foreign entities are disposed of that directly or indirectly own or derive value from underlying assets in Chile.
Similar to Resolution No. 65 of 2015, Resolution No. 119 of 2020 provides that the declaration must be submitted to the SII by the last business day of the month following the month in which the foreign entity is disposed of. Exceptionally, and only in the case of entities resident in Chile or permanent establishments located in the country that have not had timely knowledge of the operation carried out abroad, it is provided that the declaration may be submitted by the last business day of the sixth month after the month in which the foreign entity is disposed of.
Resolution No. 119 of 2020 will apply from 1 January 2021.
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