Recently implemented in Chile, the Capital Repatriation Law establishes a voluntary and extraordinary framework for taxpayers domiciled, residing, or established in Chilean territory before January 1, 2023, to declare assets and income they hold abroad.
Below are the most relevant aspects of this regulation:
Purpose of the Law
The law allows taxpayers to voluntarily declare their assets and income acquired abroad before January 1, 2023, and the income generated by these assets up to December 31, 2023. This process applies in cases where these assets were not timely declared or taxed in Chile.
Declaration Procedure
To benefit from this law, the taxpayer must submit electronically, through the website of the Chilean Internal Revenue Service (SII) the following documents:
- Extraordinary sworn statement of assets and income.
- Inventory of assets and income.
Both must be completed using Form No. 1920 and its corresponding annex. The statement must include detailed information demonstrating the ownership, origin, traceability, and any transfer of ownership of the declared assets since their acquisition.
Traceability and Documentation
One crucial requirement is that the taxpayer presents clear evidence of the origin and traceability of the funds or assets in question. This includes information on the date and form of acquisition, and expenses or consumption made with those funds. This accuracy is essential to establishing proper traceability of the assets up to the time of declaration.
Payment of a Unique Tax
The law establishes a unique tax of 12% on the value of the declared assets and income. This tax replaces any other levy that may have previously affected these undeclared assets in Chile. Payment can be made in Chilean pesos, U.S. dollars, or euros, giving taxpayers flexibility to fulfill their tax obligations.
Audit and Expiry of SII’s Review Powers
Once the declaration is submitted and the established requirements are met, the SII has 12 months to audit the conformity of the information provided. After this period, and in the absence of observations, it is assumed that the declaration complies with the law, and the SII’s powers of review and audit automatically expire. Likewise, any civil, criminal, or administrative liabilities arising from the initial omission to declare are extinguished.
Regularization of Foreign Exchange Obligations
Taxpayers who join this regime must, if necessary, regularize their foreign exchange obligations with the Central Bank of Chile, in accordance with current provisions.
Application Deadline
The period to take advantage of this law begins on the first day of the month following the official publication of the project and ends on November 30, 2024, providing taxpayers a limited window to declare their unregistered assets.
How Can AIM Global Help You Make Use of This Benefit?
The 2024 Capital Repatriation Law offers an opportunity to regularize undeclared foreign assets through a simplified process and the application of a unique tax. This measure seeks to encourage fiscal transparency and facilitate compliance with obligations while reducing legal risks for taxpayers who join within the stipulated period.
At AIM Global, we have a team of professionals prepared to assist you with everything related to the preparation and submission of the «Declaración jurada extraordinaria de Bienes y Rentas» and the «Inventory of Assets and Income,» using Form No. 1920 and its respective annexes.
We understand that each case is unique, and we will accompany you until the end of the process and the payment of the tax. Schedule a meeting with us and take advantage of this opportunity.
