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5.5. Source Rules with Respect to Income Derived by Non-Residents

Dividends

Dividends paid to a non-resident are deemed to be sourced in Chile if received from companies that are incorporated and registered in Chile.

Interest

Interest payments to a non-resident are deemed to be sourced in Chile if paid by residents of Chile or when the head office is a resident of Chile in cases where the debt is contracted for a permanent establishment situated outside Chile. Further, interest derived by non-residents from bonds and other debt instruments issued by Chilean companies in foreign markets is deemed Chilean sourced income and subject to tax in Chile.  

Royalties

Royalties paid to a non-resident are deemed to be sourced in Chile if paid for the use of industrial or intellectual property in Chile.

Service Fees

Service fees paid to a non-resident are deemed Chilean sourced if the services are rendered or used in Chile.

Capital Gains

Capital gains derived by foreign investors from the disposal of shares in Chilean entities or immovable property situated in Chile are considered as Chilean sourced income and accordingly subject to tax in Chile. It is clarified that capital gains derived by non-residents from the alienation of bonds and other debt instruments issued by resident companies in foreign markets are not Chilean-source income, and accordingly not taxable in Chile.