Chilean Tax Authority Clarifies Tax Credit for Dividends Distributed to Chinese Shareholder by Chilean Company with Insufficient Credit Balance

The Chilean tax authority (Servicio de Impuestos Internos - SII) has published Letter Ruling No. 794 of 15 April 2026, which clarifies the tax treatment of dividend distributions made by a Chilean company to a shareholder resident in China. Dividend distributions to foreign shareholders are generally subject to 35% additional tax (withholding tax), with a credit for 65% of the First Category Tax paid on the profits out of which the dividends are paid. However, if the foreign shareholder is re…