Chile vs “Retro S.A.”, August 2017, Supreme Court, Case N° 40.154-2017

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Whether the rule applicable to the specific situation had to be in force at the time the taxable event – in this case to the sales of the land, which were made during 2008 , 2009, 2010 and 2011, The time when the former Article 17 No. 8 of the Income Tax Law was in force – or at the later time when the tax assessment was being carried out, according to Article 64 of the Tax Code, when the rule modified by Law 20 was in force.

Only once the tax authorities exercised the power to assess under Article 64 of the Tax Code, and determined that the sale was made at a value significantly higher than the commercial value of properties with similar characteristics and locations in the respective locality, was the right of the authority to collect the taxes established by the same provision born”. (Supreme Court, paragraph 7).


“That, consequently, the rate of 35% should be applied to the amounts determined by virtue of the provisions of Article 64 of the Tax Code -as occurred in this case-, in accordance with Law No. 20,630, which, given its time of entry into force, governed the facts of the settlements known in these proceedings.
(Supreme Court, paragraph 8).


“That from the above reasoning, it can be concluded that the appealed judgment has not incurred in the errors of law attributed to it by the arbitration, which, therefore, must be dismissed. (Supreme Court, ninth recital).

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TP Chile

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