Capital repatriation law: What you need to know
Recently implemented in our country, the Capital Repatriation Law establishes a voluntary and extraordinary framework for taxpayers domiciled, resident or incorporated in the country before January 1, 2023, to declare assets and income they own abroad.
The most relevant aspects of this regulation are detailed below:
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 said assets until December 31, 2023. This process is applicable in cases where these assets were not duly declared or taxed in Chile.
Procedure for the Declaration
To qualify for this law, the taxpayer must submit electronically, through the website of the Internal Revenue Service (SII):
- Extraordinary sworn statement of assets and income.
- Inventory of assets and income.
Both documents must be completed using Form No. 1920 and its corresponding annex. The declaration must include detailed information demonstrating ownership, origin, traceability, and any changes in ownership of the declared goods since their acquisition.
Traceability and Documentation
One of the crucial requirements is that the taxpayer must provide clear evidence of the origin and traceability of the funds or assets in question. This includes information on the date and method of acquisition, as well as the expenses or consumption incurred with those funds. This precision is essential to establish proper traceability of the assets up to the time of filing the tax return.
Payment of the Single Tax
The law establishes a single tax of 12% on the value of the declared assets and income. This tax replaces any other levy that may have affected these previously undeclared assets in Chile.
Payment can be made in Chilean pesos, US dollars, or euros, giving taxpayers flexibility to meet their tax obligations.
SII's Auditing and Statute of Limitations
Once the tax return has been filed and the established requirements met, the Chilean Internal Revenue Service (SII) has 12 months to verify the accuracy of the information provided. After this period, and in the absence of any discrepancies, the return is considered compliant with the law, and the SII's powers of review and audit automatically expire. Furthermore, any civil, criminal, or administrative liabilities that may have arisen from the initial failure to file a return are extinguished.
Regularization of Exchange Obligations
Taxpayers who adhere to this regime must, if necessary, regularize their foreign exchange obligations with the Central Bank of Chile, in accordance with current regulations.
Application Deadline
The deadline to take advantage of this law begins on the first day of the month following the official publication of the bill and ends on November 30 of the same year (2024), giving taxpayers a limited window to declare their unregistered assets.
How can AIM Global help you take advantage of this benefit?
The Capital Repatriation Act of 2024 offers an opportunity to regularize undeclared foreign assets through a simplified process and the application of a single tax.
This measure seeks to encourage fiscal transparency and facilitate compliance with obligations, while reducing legal risks for taxpayers who adhere to it within the stipulated period.
At AIM Global, we have a team of professionals ready to advise you on this matter, in everything related to the preparation and presentation of the "Extraordinary Sworn Statement of Assets and Income" and the "Inventory of Assets and Income", through Form No. 1920 and its respective Annexes. We know that each case is unique, we will accompany you until the end of the process and the payment of the tax. Schedule a meeting Join us and don't miss this opportunity.
