Montt y Cia SA updates

Pampa Camarones mining project penalised for damage to archaeological site
Montt y Cia SA
  • Environment & Climate Change
  • Chile
  • June 25 2018

The government recently filed a compensation claim for environmental damage against mining company Pampa Camarones. The claim was based on the fact that Pampa Camarones' operations had violated a series of measures that the regional evaluation commission had stipulated to protect a nearby archaeological site. As a result, over 15 hectares of the site were destroyed without the required measures being undertaken to protect its archaeological value.

Nothing is certain but death and taxes: Tax Department considers taxation of cryptocurrencies
Montt y Cia SA
  • Corporate Tax
  • Chile
  • June 22 2018

A taxpayer recently requested a ruling from the Tax Department on the treatment of gains from cryptocurrency transactions for income and value added tax purposes, as cryptocurrencies are not specifically regulated in Chile or recognised as legal tender or foreign currency. The department's analysis reflected the broad definition of 'income' in the Income Tax Act and the fact that there is no specific exemption or favourable treatment given to these specific gains.

Legal framework for lithium gets recharged
Montt y Cia SA
  • Energy & Natural Resources
  • Chile
  • May 21 2018

Until 1979, the Mining Code 1932 defined the legal regime for lithium. During that period, lithium was treated like any other mineral and could be privately owned without special restrictions. This situation has changed with the enactment of a number of laws. Most recently, the Ministry of Mining's Supreme Decree 64 established special operation contract requirements and conditions for the exploration, exploitation and processing of lithium deposits in the Atacama region.

INAPI designated as international searching and preliminary examining authority
Montt y Cia SA
  • Intellectual Property
  • Chile
  • May 07 2018

In 2015 the National Institute of Industrial Property (INAPI) was designated as an international searching authority (ISA) and international preliminary examining authority (IPEA) under the Patent Cooperation Treaty. From January 1 2018, the INAPI can issue international search and preliminary examination reports for Chilean applicants and applicants from Latin American and Caribbean countries that have designated the INAPI as their ISA and IPEA.

Tax implications for foreign mergers
Montt y Cia SA
  • Corporate Tax
  • Chile
  • April 06 2018

A business group recently requested an advance ruling from the Internal Revenue Service regarding the merger of a Chilean subsidiary with a company resident in a low-tax jurisdiction. The service stated that pursuant to Article 64 of the Tax Code, it will not exercise its assessment authority where it has been effectively proven that the legal effects of a merger in another country will be carried out in accordance with Chilean legislation and that the operation will be carried out under the terms of tax neutrality.

SoE orders permanent closure of Pascua Lama mine
Montt y Cia SA
  • Environment & Climate Change
  • Chile
  • March 26 2018

The Superintendence of the Environment (SoE) recently issued an environmental resolution ordering the permanent cessation of Compañía Minera Nevada (CMN) SpA's Pascua Lama mining project. After having considered the background and evidence provided during the investigative process, the SoE ordered the permanent closure of the mining site based on a number of breaches and imposed a series of fines. CMN SpA has filed a complaint against the resolution.

Technology and innovation support centre inaugurated
Montt y Cia SA
  • Intellectual Property
  • Chile
  • March 05 2018

The National Institute of Industrial Property (INAPI) recently inaugurated its technology and innovation support centre, which was backed by the World Intellectual Property Organisation. The INAPI also recently implemented an advanced electronic signature programme, strengthened security measures to safeguard information and initiated a pilot plan that will enable the institute to become a paperless organisation.

Defining permanent establishments for tax purposes
Montt y Cia SA
  • Corporate Tax
  • Chile
  • February 02 2018

The Tax Department recently issued Circular 57, which provides a definition of a 'permanent establishment' for domestic law purposes and underlines that such fixed places of business require a tax registration number. Although the circular has been issued with a limited scope, it may have additional benefits, including identifying whether a foreign entity or individual has a permanent establishment operating in Chile.

Lights on – El Pelicano solar park opened
Montt y Cia SA
  • Energy & Natural Resources
  • Chile
  • January 29 2018

The El Pelicano solar park, a photovoltaic power plant located north of Santiago, was recently opened. The plant, which represents an investment of $250 million, has a capacity of 110 megawatts (MW) and will provide approximately 42% of the energy required by the Santiago subway system. In 2014 solar power in Chile had an installed capacity of 11 MW. With the launch of the El Pelicano project, this capacity has risen to 2,100 MW.

Supreme Court decision on completion of title for water rights
Montt y Cia SA
  • Environment & Climate Change
  • Chile
  • January 15 2018

A recent Supreme Court of Justice decision required the applicant in a proceeding initiated to complete the good and legal title of surface water rights to notify all holders of water rights in the same watershed to which the application referred. Failure to involve other rights holders in the same river basin in the respective proceedings, as required by this decision, could render subsequent proceedings obsolete and thus result in the loss of considerable time for the applicant.

New law reforms IP Act and creates new ministry
Montt y Cia SA
  • Intellectual Property
  • Chile
  • December 18 2017

Law 21,045, which was recently published in the Official Gazette, created the Ministry of Culture, Arts and Patrimony and reformed the IP Act through the creation of the National Cultural Patrimony Service. Under the changes introduced, the Intellectual Rights Department is now under the auspices of the National Cultural Patrimony Service. As a result, all IP matters are now part of the new Ministry of Arts, Cultures and Patrimony.

Supreme Court overturns decisions denying taxpayers' authority to issue tax invoices
Montt y Cia SA
  • Corporate Tax
  • Chile
  • November 03 2017

The Supreme Court recently revoked two appeal court decisions in which the underlying issue was the Tax Department's authority to deny taxpayers the ability to issue invoices in certain circumstances. It is unclear whether the Tax Department will review its criteria in this regard, as court decisions in Chile affect only the parties in the specific case.

Green tax on industrial emissions approved
Montt y Cia SA
  • Environment & Climate Change
  • Chile
  • October 23 2017

Congress recently approved a tax reform that introduced a new Pigovian or green tax and amended income and indirect tax rates. The green tax will apply directly to emissions derived from industrial processes that result in environmental damage. The new tax will be implemented before the end of 2017 and will affect industrial establishments that use boilers or turbines.

Withholding tax on interest paid on certain portfolio investments – an overview
Montt y Cia SA
  • Corporate Tax
  • Chile
  • September 15 2017

A taxpayer resident in Chile with a portfolio investment in the United States recently requested a ruling on whether he was entitled to a refund of certain withholding taxes paid by the portfolio because it included bonds issued in Chile. The taxpayer argued that withholding tax should be refunded to the beneficiary of the interest if the beneficiary is a Chilean resident. However, the Tax Department took a different view.

Trademark Office rejects trademark applications for differences between applied trademark and applicant
Montt y Cia SA
  • Intellectual Property
  • Chile
  • July 31 2017

The Trademark Office recently rejected several trademark applications containing the terms 'corporation', 'corporations' or similar when the applicant was not a US-based company on the basis that they would result in error or confusion. However, the Industrial Property Appeals Court dismissed this argument and revoked the Trademark Office's decisions, stating that the law does not require a trademark to be concordant with the applicant's corporate structure or organisation.

Tax consequences of mergers for accumulated profits
Montt y Cia SA
  • Corporate Tax
  • Chile
  • June 23 2017

A taxpayer recently requested a ruling on whether a certain type of tax treatment was available following the merger and consolidation of a group. The tax department ruled that the individuals who owned shares in the resultant entity were entitled to use a variable tax rate rather than the 32% fixed tax rate on corporate income tax already paid on profits, as there is no transfer of property in a merger process, but rather an assignment of property to a person who already has a legal interest therein.

Industrial Property Appeals Court grants favourable decision to Pablo Neruda Foundation
Montt y Cia SA
  • Intellectual Property
  • Chile
  • April 17 2017

After more than eight years of litigation, the Pablo Neruda Foundation (heir to the rights of the Nobel Prize-winning Chilean poet Pablo Neruda) obtained a favourable decision from the Industrial Property Appeals Court regarding its annulment action against the Reyes hereditary succession. This decision is not only relevant as an example of the application of IP Law and the Succession Law, but also refers to one of Chile's most famous names.

Ruling under Chile-UK double tax treaty on permanent establishment and entitlement to treaty benefits
Montt y Cia SA
  • Corporate Tax
  • Chile
  • April 07 2017

A taxpayer recently requested a ruling from the Chilean tax authorities on whether a branch of an entity resident in a third state should be considered a UK resident for the purpose of claiming the benefits provided under the Chile-UK double tax treaty. The tax department concluded that the person claiming benefits under the treaty was a resident of a third state and that its UK branch or permanent establishment did not meet the requirements to qualify as a UK resident under the treaty.

INAPI applies latest version of Nice Classification
Montt y Cia SA
  • Intellectual Property
  • Chile
  • February 06 2017

The National Institute of Industrial Property (INAPI) recently announced that, as of January 4 2017, it will apply the 11th edition of the Nice Classification for Goods and Services to all new trademark applications. By adopting the 11th edition of the Nice Classification, INAPI now maintains the same standards as the World Intellectual Property Organisation, thus providing improved international protection for trademarks.

New rules for selection of tax regime introduced
Montt y Cia SA
  • Corporate Tax
  • Chile
  • January 06 2017

The recent tax reform introduced by Law 20,780 has provided for two alternative tax regimes: the attributed regime and the partially integrated regime. The attributed regime applies to individual entrepreneurs, limited liability companies, communities and joint stock companies, while the partially integrated regime is obligatory for corporations and companies whose members and shareholders are other companies (resident or non-resident).