ARTICLE 13
Capital Gains
(1) Gains derived by a resident of a Contracting State from the alienation of immovable property situated in the other Contracting State may be taxed in that other Contracting State.
(2) Gains from the alienation of any property, other than immovable property, forming part of the business property of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State or of any property, other than immovable property, pertaining to a fixed base available to a resident of a Contracting State in the other Contracting State for the purpose of performing independent personal services, including such gains from the alienation of such a permanent establishment (alone or with the whole enterprise) or of such a fixed base, may be taxed in that other Contracting State.
(3) Gains derived by an enterprise of a Contracting State from the alienation of ships or aircraft operated by that enterprise in international traffic or any property, other than immovable property, pertaining to the operation of such ships or aircraft shall be taxable only in that Contracting State.
(4)
- (a) Gains derived by a resident of a Contracting State from the alienation of shares, comparable interests or other rights may be taxed in the other Contracting State if:
- (i) the alienator at any time during the 365 days preceding such alienation owned, directly or indirectly, shares, comparable interests or other rights representing 20 per cent or more of the capital of a company that is a resident of that other Contracting State; or
- (ii) at any time during the 365 days preceding such alienation, such shares, comparable interests or other rights derived 50 per cent or more of their value, directly or indirectly, from immovable property situated in that other Contracting State.
- (b) Any other gains derived by a resident of a Contracting State from the alienation of shares, comparable interests or other rights representing the capital of a company that is a resident of the other Contracting State may also be taxed in that other Contracting State but the tax so charged shall not exceed 16 per cent of the amount of the gains.
- (c) Subject to the provisions of clause (ii) of sub-paragraph (a) of this paragraph, gains derived by a recognised pension fund that is a resident of a Contracting State from the alienation of shares, comparable interests or other rights referred to in sub-paragraphs (a) and (b) shall be taxable only in that Contracting State.
- (d) Notwithstanding sub-paragraphs (a) and (b) of this paragraph, gains derived by a resident of a Contracting State from the alienation of shares of a company that is a resident of the other Contracting State and whose shares are substantially and regularly traded on a recognized stock exchange located in that other Contracting State shall be taxable only in the first-mentioned State if the shares were sold:
- (i) on a recognized stock exchange in that other Contracting State; or
- (ii) in a public offer for the acquisition of shares regulated by law;
- provided that such shares were previously acquired either:
- (i) on a recognized stock exchange in that other Contracting State;
- (ii) in a public offer for the acquisition of shares regulated by law;
- (iii) in a placement of first issue shares by that company at the time of the incorporation of that company or of an increase in the capital of that company; or
- (iv) in an exchange of bonds convertible into shares.
(5) Gains from the alienation of any property other than that referred to in the preceding paragraphs of this Article shall be taxable only in the Contracting State of which the alienator is a resident.
(6) For the purposes of this Article, the term “recognized stock exchange” means:
- (i) In the case of the United Arab Emirates:
- (a) Dubai Financial Market;
- (b) Abu Dhabi Securities Exchange; and
- (c) Nasdaq Dubai;
- (ii) In the case of the Republic of Chile:
- (a) the “Bolsa de Comercio de Santiago”, “Bolsa Electronica de Chile” and “Bolsa de Corredores”; and
- (iii) Any other stock exchange agreed upon by the competent authorities of the Contracting States.
(7) In the event that pursuant to a convention concluded with a country after the date of signature of this Convention Chile agrees to terms that further limit the right to tax gains under paragraph (4) of this Article with respect to entities described in sub-paragraph (k) of paragraph (1) of article 3, the Contracting States shall, at the request of United Arab Emirates, consult with a view to amending the Convention to incorporate such limiting terms into the Convention.