• 1. Freight tax

Freight tax

Chilean source income obtained by non-residential shipowners and/or operators is subject to additional tax which is normally paid through a withholding mechanism as follows: 

  • 5% of the gross freight earnings (voyage charter [inward and outward], time charter and bareboat hire) derived from international transport activities of non-residential shipowners and/or operators.

     
  • 20% of the gross revenue derived from the employment of non-Chilean vessels in cabotage trade. (Note: Cabotage trade is reserved to Chilean flag vessels or vessels chartered by Chilean shipping companies.)


Exemption Agreements
Residents of the following countries may benefit from  double taxation agreements, which reduce or waive the tax on voyage earnings underinternational transport activities.

Country Reduction Date of entry
into force
Date of effect
Argentina 100%  11/10/2016 01/01/2017
Australia 100% 08/02/2013 01/01/2014
Austria 1 100% 09/09/2015 01/01/2016
Belgium 2 100% 05/05/2010 01/01/2011
Brazil 1 100% 24/10/2003 01/01/2004
Canada 100% 08/02/2000 01/01/2000
China4 100% 08/08/2016 01/01/2017
Colombia 100% 22/12/2009 01/01/2010
Croatia 100% 21/12/2004 01/01/2005
Czech Republic 100% 01/01/2017 01/01/2017
Denmark 100% 10/02/2005 01/01/2005
Ecuador 100% 24/10/2003 01/01/2004
France 100% 10/07/2006 01/01/2007
Japan 100% 28/12/2016 01/01/2017
Ireland 100% 28/08/2008 01/01/2009
 Italy 100% 22/12/2016 01/01/2017
Korea, Republic of 100% 20/10/2003 01/01/2004
Malaysia 100% 25/08/2008 01/01/2009
Mexico 100% 08/02/2000 01/01/2000
New Zealand 100% 21/06/2006 01/01/2007
Norway 100% 20/10/2003 01/01/2004
Paraguay 100% 26/08/2008 01/01/2009
Peru 100% 13/11/2003 01/01/2004
Poland 100% 30/12/2003 01/01/2004
Portugal 100% 28/10/2008 01/01/2009
Russia 100% 28/02/2012 01/01/2013
South Africa 100% 11/08/2016 01/01/2017
Spain 100% 24/01/2004 01/01/2004
Sweden 100% 30/12/2005 01/01/2006
Switzerland 100% 05/05/2010 01/01/2011
Thailand 50% 05/05/2010 01/01/2011
United Kingdom 100% 21/12/2004 01/01/2005
 
Limited Treaties (Air and/or Sea)
France (Air only) 0%    
Germany (Sea only) 100%    
Germany (Air only) 0%    
Panama (Air only) 0%    
Singapore (Sea only) 100% 26/11/1993 26/11/1993
Switzerland (Air only) 0%    
United States (Air only)
0%    
Uruguay (Air only) 0%    
Venezuela (Air & Sea) 100%    
 
Double Taxation Agreements which are signed but not ratified
Country Reduction  Signed  
 Uruguay 100% 01/04/2016  
United States 100% 04/02/2010  
 
Double Taxation Agreements under negotiation  
Country      
Cuba      
Finland      
Hungary      
India      
Kuwait      
Netherlands      
Uruguay      
Venezuela      


Exemption based of reciprocity
In accordance with Ministry of Finance Law No. 18.031 dated 2 September 1981 refunds can also be obtained on the basis of reciprocity.

Companies may apply for a refund by submitting a certificate from their country's tax office which states that their country does not levy tax on ocean freights earned by Chilean companies/citizens. Such applications are to be lodged with the Chilean Treasury Secretary. If accepted, exemption is granted regardless of vessel's flag.

To date Chile has concluded reciprocal agreements with the following countries granting exemption from additional tax.


List of countries as per Circular No.28 dated 23/05/2003 issued by the Internal Revenue Service
(Servicio de Impuestos Internos, SII)

List A
Exemption requires that both the vessel’s flag and the freight recipient’s country of residency are included in the list below:
   
Country Ministry of Treasury Decree No.
Antigua and Barbuda 204 dated 18/12/2001
Argentina 241 dated 27/11/1981
Australia 049 dated 21/02/1989
Austria 241 dated 27/11/1981
Bahamas 046 dated 08/04/1982
Belgium 241 dated 27/11/1981
Bermuda 027 dated 01/03/1982
Bolivia 241 dated 27/11/1981
Brazil 241 dated 27/11/1981
Canada 241 dated 27/11/1981
Cayman Islands 426 dated 23/12/1985
China 4 210 dated 18/12/1984
China 5 090 dated 02/07/1986
Colombia 241 dated 27/11/1981
Congo, Dem. Rep. of (ex Zaire) 018 dated 14/03/1983
Cuba 024 dated 03/02/1994
Cyprus 193 dated 28/12/1982
Czech Republic 254 dated 31/08/1992
Denmark 241 dated 27/11/1981
Dominican Republic 241 dated 27/11/1981
Ecuador 129 dated 04/07/1990
Finland 241 dated 27/11/1981
France 241 dated 27/11/1981
Germany 241 dated 27/11/1981
Greece 241 dated 27/11/1981
Guyana 241 dated 27/11/1981
Haiti 041 dated 31/03/1982
Hungary 241 dated 27/11/1981
Ireland 241 dated 27/11/1981
Israel 014 dated 21/01/1982
Italy 241 dated 27/11/1981
Ivory Coast 041 dated 31/03/1982
Japan 241 dated 27/11/1981
Korea, Republic of 241 dated 27/11/1981
Liberia 241 dated 27/11/1981
Liechtenstein 041 dated 31/02/1982
Luxembourg 073 dated 12/03/1993
Marshall Islands 203 dated 18/12/2001
Mexico 241 dated 27/11/1981
The Netherlands 241 dated 27/11/1981
Netherlands Antilles 088 dated 02/07/1982
New Zealand 019 dated 23/03/1983
Nicaragua 018 dated 14/03/1983
Norway 241 dated 27/11/1981
Panama 018 dated 29/01/1982
Paraguay 241 dated 27/11/1981
Peru 241 dated 27/11/1981
Poland 041 dated 31/03/1982
Portugal 041 dated 31/03/1982
Qatar 016 dated 09/01/1996
Russia 221 dated 02/11/1990
Revised 298 dated 14/12/1993
El Salvador 018 dated 14/03/1983
Saudi Arabia 018 dated 14/03/1983
Serbia and Montenegro 6 014 dated 21/01/1982
Singapore 906 dated 25/11/1993
South Africa 232 dated 29/09/1995
Spain 241 dated 27/11/1981
Sri Lanka 275 dated 05/10/1989
Sweden 241 dated 27/11/1981
Switzerland 241 dated 27/11/1981
United Arab Emirates 004 dated 09/01/1984
United Kingdom 241 dated 27/11/1981
United Kingdom Territories  
  Anguilla 090 dated 02/07/1986
  British Indian Oceanic Territory 090 dated 02/07/1986
  British Virgin Islands 090 dated 02/07/1986
  Falkland Islands 090 dated 02/07/1986
  Gibraltar 090 dated 02/07/1986
  Montserrat 090 dated 02/07/1986
  Pitcairn Islands 090 dated 02/07/1986
  Santa Helena 090 dated 02/07/1986
  Turks and Caicos Islands 090 dated 02/07/1986
United States 241 dated 27/11/1981
Uruguay 241 dated 27/11/1981
Vanuatu 051 dated 14/05/1986
     
List B
Exemption based solely on freight recipient’s country of residency with respect to maritime transportation earnings only.
   
Country Ministry of Treasury Decree No.
Bolivia 166 dated 22/08/1991
Cayman Islands 342 dated 30/11/1989
Denmark 018 dated 13/01/1993
South Africa 232 dated 29/09/1995
United States 007 dated 09/01/1987
 
List C
Exemption based solely on freight recipient’s country of residency with respect to all income (not restricted to maritime transportation earnings).
   
Country Ministry of Foreign Affairs Decree
Brazil 501 dated 19/07/1976
Canada 1594 dated 06/01/1996
Colombia 833 dated 08/02/1978
Germany 203 dated 26/06/1953
Singapore 906 dated 25/11/1993
Venezuela 238 dated 18/04/1994
 

Notes:

  1. Profits derived from the international operation of a ship includes profits derived from the charter or rental on a bareboat basis of a ship, if that charter or rental is incidental to the operation by the enterprise of ships in international traffic.

  2. Profits from the operation of ships in international traffic includes:
    a) profits from the leasing of ships on charter fully equipped, manned and supplied by the enterprise engaged in international traffic;
    b) profits from the leasing of ships on a bareboat charter basis if such leasing activity is an ancillary activity for the enterprise engaged in international traffic;    

  3. Chile previously had a double taxation agreement with Argentina which was in effect from 1986 until 1 January 2013 when it was terminated and ceased to apply.

  4. Excludes residents of Hong Kong, SAR; Macao, SAR and the province of Taiwan.
     
  5. Refers to Hong Kong, SAR only
      
  6. Covered under former Yugoslavian agreement
       

 

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