Chile – Tax Administration issues regulations to “Master Files Annual Tax Return” and “Local File Annual Tax Return”

Last September 3^rd, 2020, the Chilean Tax Administration published Exempt Resolution No. 101, which sets forth that taxpayers that meet any of the below-stated conditions shall file an annual tax return through Form No. 1950 “Master File Annual Tax Return”. Further, said taxpayers must also file an Annex to such Form regarding Descriptive Information of the Annual Master File Tax Return together with the documents stated in the text of Annex III, and in line with Annex IV, to this Exempt Resolution. These filings should be made through the electronic file specially authorized for these purposes.

A. Conditions:

i) The parent or controlling entity of the Multinational Economic Group which is Chilean Tax Resident provided that the income of all the entities belonging to that Group in Chile and abroad, is less than €750.000.000 by December 31^st of the year being reported and by the time the consolidated financial statements close, according to the Exchange rate of January 1^st, 2015.

ii) The entity that belongs to the Multinational Economic Group is a tax resident of Chile and was appointed by the parent or controlling entity of said group as the single substitute of such parent for purposes of filing the “Country-by-Country” report in the relevant tax residence country in the name of said parent or controlling entity.

On the other hand, this Exempt Resolution No. 101 sets forth that the following taxpayers shall file an annual tax return through Form No. 1951 “Local File Annual Tax Return”, in line with Annexes IV and V to this Exempt Resolution. Additionally, they must file an Annex to such Form regarding Descriptive Information of the Local Master File Tax Return, as stated in the text of Annex VI, and in line with Annex VII, to this Exempt Resolution. These filings should be also made through the electronic file specially authorized for these purposes.

B. The following taxpayers must comply with the above:

i) Those belonging to the Large Entities Sector in line with the criteria established by Exempt Resolution No. 76 of 2017.

ii) Those whose parent or controlling entity must have complied with the Country-by-Country Report filing for the relevant year; and

iii) Those that in such year must have entered into one or more transactions amounting more than Chilean Pesos 200,000,000 – or its equivalent in line with the Exchange parity in force by December 31^st of the year being reported, with related parties with no Chilean domicile or residence, in line with article 41 E of the Income Tax Law.

The abovementioned tax return and annexes filings are due the last business day of June of each year, regarding the transactions entered into during the immediately prior commercial year. This term shall be able to receive a one-time 3-month extension, in line with number 6 of article 41E of the Income Tax Law.