Taxation Of Foreign Engineering Services In Chile

Payments that are made out of Chile for technical services are regulated by Article 59 Nº 2 of the Income Tax Law, which is the general rule on this matter. It establishes an Additional Tax, which is a unique income withholding tax with a 15% rate, applied on the total of the remittance without any possible deduction.

Payments done to any company with residency outside of Chile are subject to the unique Additional Tax of 15%, as it would be technical advice. However, for the engineering services to qualify as a technical advisory, it must exist as a document, which can be a guidance, report or a plan.

However, this rate is higher (20%) if the foreign company that is providing the services is related to the company that requests or pays for this services.

The services wouldn't be levied value-added tax.

Also, according to article 74 Nº 4 of the Income Tax Law, the taxpayers that remit incomes affected to Additional Tax must withhold this tax at the moment of payment, hand it to...