Chile Clarifies Tax Treatment of International Merger

The Chilean tax authority (Servicio de Impuestos Internos - SII) has published Letter Ruling No. 798 of 26 March 2021 concerning the tax treatment of a merger (absorption) transaction involving a Chilean company and a Luxembourg company, the shares of which were held by the Chilean company. As part of the group's plans for simplifying its international structuring, the Chilean company would absorb the Luxembourg company.

The letter ruling clarifies that in such cases where a foreign company …