Chile — Exchange of Notes / Understanding (2023)

MINISTERIO DE RELACIONES EXTERIORES
No. 1049
El Ministerio de Relaciones Exteriores presenta sus atentos saludos a la Embajada de
Estados Unidos de América en Chile, y tiene el honor de referirse a su Nota No. 523-2023 de 28 de septiembre de 2023. que señala lo siguiente:
"The Embassy of the United States of America presents its compliments to the
Ministry of Foreign Affairs of the Republic of Chile and has the honor to refer to the
Convention between the Government of the United States of America and the Government of the Republic of Chile for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income and Capital, with Protocol and related agreement, done at Washington February 4. 2010, and to the exchanges of notes dated February 23 and 25, 2011. and February 10 and 21. 2012. which effected textual corrections to the Convention and Protocol (the aforementioned instruments together constituting "the Convention ").
The United States Senate on June 22. 2023, gave its advice and consent to ratification of the Convention subject to two reservations, which the United States seeks the Republic of Chile's agreement to effect through amendments to the Convention as described below. In particular. Section 2 of the Senate's Resolution of Ratification reads as follows:
The advice and consent of the Senate under Section 1 is subject to the following reservations, which shall he included in the instrument of ratification:
(1)
Nothing in the Convention shall be construed as preventing the United States from imposing a tax under section 59A, entitled the "Tax on Base Erosion Payments of Taxpayers with Substantial Gross Receipts. " of the Internal Revenue Code (as it may he amended from time to time) on a company that is a resident of the United States or the profits of a company that is a resident of Chile that are attributable to a permanent establishment in the United States.
(2) Paragraph 1 of Article 23 (Relief from Double Taxation) of the Convention shall he deleted and replaced by the following:
" 1. In accordance with the provisions and subject to the limitations of the law of the United States (as it may be amended from time to time without changing the general principle thereof): a) the United States shall allow to a resident or citizen of the United States as a credit against the United States tax on income applicable to residents and citizens the income tax paid or accrued to Chile by or on behalf of such citizen or resident. For the purposes of this subparagraph, the taxes referred to in subparagraph b) of paragraph 3 and paragraph 4 of Article 2 (Taxes Covered), excluding taxes on capital, shall be considered income taxes: and b) in the case of a United States company owning at least 10 percent of the aggregate vote or value of the shares of a company that is a resident of Chile and from which the United States company receives dividends, the United States shall allow a deduction in the amount of such dividends in computing the taxable income of the United States company. ” Consistent with the Senate’s Resolution, ratification of the Convention by the Government of the United States of America shall he subject to the above reservations, which shall he included in the United Stales instrument of ratification of the Convention.
Accordingly, in order to confirm that the above reservations are acceptable to the
Government of Chile, the Embassy on behalf of the Government of the United States proposes that the two governments agree to amend the Convention by deleting paragraph 1 of Article 23 of the Convention (Relief from Double Taxation) and replacing it with the following text:
"1. In accordance with the provisions and subject to the limitations of the law of the United States (as it may be amended from time to time without changing the general principle thereof): a) the United States shall allow to a resident or citizen of the United States as a credit against the United States tax on income applicable to residents and citizens the income tax paid or accrued to Chile by or on behalf of such citizen or resident. For the purposes of this subparagraph, the taxes referred to in subparagraph b) of paragraph 3 and paragraph 4 of Article 2 (Taxes Covered), excluding taxes on capital, shall be considered income taxes; and b) in the case of a United States company owning at least 10 percent of the aggregate vole or value of the shares of a company that is a resident of Chile and from which the United States company receives dividends, the United States shall allow a deduction in the amount of such dividends in computing the taxable income of the United States company."
The Government of the United States further proposes that paragraph 1 of Article 23 of the Spanish language text of the Convention he deleted and replaced with the following text:
De acuerdo con las disposiciones y sujeto a las limitaciones de la legislación de los Estados Unidos (aun cuando fuere eventualmente enmendada sin alterar el principio general de la misma): a) los Estados Unidos permitirán a un residente o ciudadano de los Estados Unidos acreditar contra el impuesto sobre la renta estadounidense aplicable a residentes y ciudadanos el impuesto sobre MINISTERIO DE RELACIONES EXTERIORES la renta pcif!,ado o devengado en Chile por o a rnenta de! ciudadano o residente. Para los efectos de este suhpitrrafo. /os impuestos referidos en el subpc1rrafo h) de/ parrafh 3 y en el parrqfi.J -I de/ articulo 2 ( Jmpuestos Comprendidos). excluyendo los impuestos sohre el patrimonio. se consideraran impuestos sohre la renta: y h) en el caso de una sociedad estadounidense que posea a lo me nos el I 0 por ciento de/ total de/ derecho a voto o de/ rnlor de las acciones de una sociedad residente de Chile y re.\pecto de la cue,! la sociedad estadounidense recibe diridendos. los Estados Unidos permitinin una deducci6n en el monlo de tales dividendos al computar la renta imponible de la sociedad estadounidense.
In addition. the Government of the {Jnited States q{America proposes that the 11rn governments agree that nothing in the Convention shall he construed as preventing the
United States fi-<nn imposing a tax under section 59A, entitled the "Tax on Base Erosion
J>a.vments <fTaxpayers with Suhstantial Gross Receipts." <?lthe U.S. lmernal Revenue Code
(as it may be amended.fi-om time lo time) on a company that is a resident olthe United States or the profits o( a company that is a resident o( Chile that are allrihutable to a permanent estahlishment in the United Stales. and that the Conl'ention be amended according(v.
J(lhe foregoing proposals are acceptable to the Governmenl <?lthe Republic <?lChile. the Embas!.)' fi,rther proposes that this diplomatic note and the minist1J' :ä affirmatil'e diplomatic note in reply constitllle an agreemenl between the two gm·ernments to amend the Convention. which agreement shall enter inlo force on the date the Convention enters info force in accordance with Article 29 <?(the Conrention. "
Al respecto. el Ministerio de Relaciones Exteriores tiene el honor de cornunicar a la
Embajada de Estados Unidos de America que el Gobierno de la Republica de Chile acepta las propuestas anteriores. y confirma que su Nota No. 523-2023 de 28 de septiembre de 2023 y esta Nota en respuesta constituyen un acuerdo entre ambos gobiernos para enmcndar el Convenio. el cual entrara en vigor en la fecha en que el Convenio entre en vigor de conformidad con el Articulo 29 <lei Convenio.
El Ministerio de Relaciones Exteriores de la Republica de Chile se vale de csta oportunidad para reiterar a la Embajada de Estados Unidos de America en Chile las seguridades de su mas alta consideraci6n.
SANTIAGO,
O 6 OCT. : !&J
A LA HONORABLE
EMBAJADA DE ESTADOS lJNIDOS DE AMERICA
PRESENTE
MINISTERIO DE RELACIONES EXTERIORES
RMB/CGF/CAA
DISTRIBUCION:

1. Embajada de Estados Unidos de America
2. Gabinete SUBREI (info)
3. Direcci6n General de Asuntos Econ6micos Bilaterales (info)
4. Direcci6n General de Asuntos Econ6micos Multilaterales (info)
5. Of. Partes - SUBREI
6. Archivo