Nissan Chile SpA, a wholly-owned subsidiary of Nissan Motor Co. Ltd. (Japan), was incorporated in Chile in August 2014 to take over the direct distribution of Nissan-branded vehicles and spare parts previously handled by an independent distributor, Distribuidora Automotriz Marubeni Limitada. Operati ... Read more

Capitaria S.A. segmented its financial statements to isolate income from a joint venture with related BVI entity KT Financial Group, reporting a 69.24% operating margin. Chilean tax authorities challenged the segmentation methodology, alleging tax base erosion risks. The District Court and subsequently the Court of Appeal in 2024 both ruled in favour of the taxpayer, confirming that the segmented results adequately demonstrated the joint venture's profitability and were supported by sufficient documentary evidence ... Read more

A Chilean steel company reported a 2% royalty rate under a know-how agreement with a Peruvian related party for FY2018. The tax authority reassessed the rate at 5%, citing inadequate comparables. The Court of Appeal upheld the authority's position in 2024, finding the taxpayer's transfer pricing report insufficient and confirming the higher arm's length royalty rate under the CUP method ... Read more

Walmart Chile S.A. deducted costs for inter-group management, marketing, and advertising services, along with interest on an intra-group loan, in its 2014 and 2015 tax returns. The Chilean tax authority disallowed these deductions following an audit. The Tax Court largely sided with the authority, and the Court of Appeal upheld that decision in March 2024, confirming the disallowances due to insufficient documentation ... Read more

A Chilean importer of cement sought to have customs value determined in line with its arm's length transfer pricing analysis under the TNMM method. Tax authorities rejected the declared transaction value, and the tax court dismissed the complaint. The Court of Appeal reversed this outcome in 2023, finding that the transfer pricing study reports sufficiently demonstrated the related-party relationship had not influenced the declared price ... Read more

A Chilean company sold wood chips to a related party at below-market prices. The tax authority applied Article 38 to adjust taxable income and treated the price difference as a hidden distribution of profits under Article 21. The Supreme Court dismissed the taxpayers' appeal in 2023, confirming the legal basis for the adjustment, rejecting the secret comparables challenge, and ruling that the burden of proof had not been improperly shifted ... Read more

A Chilean tax authority assessed capital gains tax on an indirect share transfer, arguing the Chile-Spain Double Taxation Convention did not restrict Chilean taxation. The Tax Court dismissed the taxpayer's challenge, but Chile's Court of Appeal reversed the decision in 2023, ruling that Article 13(4) applies only to direct transfers and that indirect transfers fall under Article 13(5), granting exclusive taxing rights to Spain as the state of residence ... Read more

Avery Dennison Chile S.A. used a full-range resale price minus method to price its distribution activities and placed surplus capital with a Luxembourg group entity at 0.79% interest. Chilean tax authorities challenged both, issuing an assessment. The Tax Tribunal found in the taxpayer's favour in March 2021, and Chile's Court of Appeal upheld that decision in May 2022, ruling the tax authority had not proved the transactions departed from arm's length conditions ... Read more

A Chilean subsidiary of US group Avery Dennison used a full-range analysis to price its distribution activities and placed surplus capital with a Luxembourg affiliate at 0.79% interest. The Chilean tax authority challenged both the distribution margins and the loan rate as non-arm's length. The Tax Court ruled in favour of the taxpayer in March 2021, finding the authority failed to prove the transactions deviated from arm's length conditions ... Read more

Following a tax authority audit of FY 2015, Walmart Chile was denied a deduction of approximately CLP 8.9 billion in interest payments on an alleged intra-group loan. The Chilean Tax Court upheld the disallowance in 2020, finding that Walmart Chile failed to prove the existence of a valid current account, a genuine business need for the debt, or that the payments generated income subject to first category tax ... Read more

Monsanto Chile, a Bayer subsidiary, faced penal interest of over CLP 2.2 billion at 1.5% per month on a tax assessment for FY 2009–2010. The company argued the interest was unconstitutional given delays caused by the courts and COVID-19. Chile's Constitutional Court agreed, ruling in a split decision that applying the penal interest under Article 53 of the Tax Code violated constitutional equality and due process guarantees ... Read more

Monsanto Chile, a seed production and contract R&D subsidiary, was audited for FY 2009–2010 by Chilean tax authorities, who found its return on total costs fell below arm's length benchmarks for both production and R&D segments. The Tax Court largely sided with the authority, confirming adjustments based on net margin comparables that placed Monsanto Chile's ROTC significantly below the identified median range ... Read more

A Chilean holding company claimed deductions for accounting and administrative services provided by a related party under a 2011 contract. The tax authority disallowed the deductions after finding insufficient evidence that services were actually rendered. Chile's Supreme Court upheld the assessment in 2018, confirming the taxpayer bore the burden of proof and had failed to demonstrate the nature or substance of each service charged ... Read more

A Chilean wood chip exporter sold products to a Japanese corporation that indirectly held a 9.8499% minority stake in the company. The tax authority treated the transactions as controlled and issued a transfer pricing adjustment. Chile's Supreme Court applied a restrictive interpretation of Article 38 of the Income Tax Law and ruled in favour of the taxpayer, finding the transactions were not controlled and no pricing adjustment was warranted ... Read more

A Chilean company challenged the tax authority's application of a 35% rate under amended legislation to land sales made between 2008 and 2011, arguing the original law should apply. The tax authority assessed the transactions under Article 64 of the Tax Code, invoking Law No. 20,630. Chile's Supreme Court upheld the assessment in 2017, ruling the amended rate applied when the assessment power was exercised, not when the sales occurred ... Read more

A Chilean company challenged transfer pricing assessments, arguing the Revenue Service failed to prove a related-party relationship with its Japanese counterpart and applied an inadmissible pricing method. The Tax Court agreed, finding no relationship under Article 38 of the Income Tax Law was established and that the transfer pricing method used by the tax authority was not admissible, ruling in favour of the taxpayer in 2015 ... Read more

Coca-Cola Embonor S.A. deducted interest payments on a loan to a related party in the Cayman Islands. Chilean tax authorities disallowed the deduction, finding the payments failed the necessary expense test under Article 31 of the Income Tax Law. The Tax Court and Court of Appeal both ruled against the taxpayer. In July 2013, Chile's Supreme Court upheld those decisions, finding the taxpayer could not prove a direct link between the interest expense and Chilean taxable income ... Read more