Tag: Indirect transfers of profit

Chile vs Inversiones Capital Global S.A., April 2023, Court of Appeal, Case N° ROL: 197-2021

Chile vs Inversiones Capital Global S.A., April 2023, Court of Appeal, Case N° ROL: 197-2021

In the present case, the tax authorities had concluded that Article 13(4) of the Double Taxation Convention with Spain did not prevent the Chilean State from taxing indirect transfers. On this basis, the tax authorities determined that capital gains resulting from an indirect transfer were fully taxable in Chile. An action brought by Inversiones Capital Global S.A. was dismissed by the Tax Court and subsequently appealed to the Court of Appeals. Judgement of the Court The Court ruled in favour of Inversiones Capital Global S.A. The Court concluded that, under the terms of the DTC between Chile and Spain, Chile had no right to tax when a Spanish resident made an indirect transfer to a Chilean company. According to the Court, Article 13(4) of the DTC applies only to direct transfers. Indirect transfers are covered by Article 13(5) and can only be taxed in the State of residence – Spain. Excerpt “(…) The first conclusion that can be drawn is ... Read more