UK-Chile Tax Treaty MFN Clause Triggered for Interest and Royalties

UK HMRC has issued an update that the MFN clause in the 2003 UK-Chile tax treaty was triggered following the entry into force of the 2016 Chile-Japan tax treaty. As a result, the following withholding tax rates apply under the UK-Chile tax treaty in respect of interest income from 1 January 2017:

• The rate is 4% where:
  • The interest is derived from loans granted by banks and insurance companies (5% if part of an arrangement involving back-to-back loans or similar arrangements);
  • The interest i…