Source: Financial Journal

A new milestone took place yesterday in the processing of the agreement to avoid double taxation between Chile and the United States, after 13 years of parliamentary discussion.

By a large majority, the US Senate Foreign Relations Committee approved the text with a series of amendments, by 20 votes in favor and one against.

Thus, the text -which was already ratified by the Chilean Congress in 2015 and signed in 2010- is ready to be analyzed by the Chamber of the North American Upper House, a process that should take place in the coming weeks.

Although everything points to an easy approval and subsequent passage into law, there are still some minor knots to be resolved, after US senators made a series of reservations on specific points, in order to align some regulations with the tax reform approved in 2017 during the government of Donald Trump.

“This treaty is vital to strengthening the competitiveness of the United States and the growth of US foreign direct investment in Chile, which is a strong democratic partner. The treaty enjoys strong support from the US business community and it is a crucial tool for the reinforcement of the tax laws of the United States,” said the chairman of the Senate Foreign Affairs Committee. Robert Menendez Democrat).

Government and private celebrate

The Chilean ambassador in Washington, Juan Gabriel Valdés, states that from the point of view of the diplomatic representations of both nations. of Chilean and North American businessmen, “and of those of us who have been fighting for years for this to advance, this is very important.

Now it is expected that it will go to the plenary session of the Senate and be approved by a very substantial majority.”

The former foreign minister explains that if it is approved, then comes a process where the Chilean Congress must be aware of the amendments that have been made to the treaty by the US. The formula for that to happen, he details, is for Congress to know it via an exchange of diplomatic notes and then it must be approved by the local Parliament “But the text is the same that was signed in 2010 and that the Chilean Congress approved in 2015 , and that it has an amendment that has to do with issues between the relationship of the Senate and the Department of the Treasury related to information issues,” he says.

The Undersecretary of International Economic Relations. Claudia Sanhueza, valued “very positively the approval of the agreement after more than a decade of discussion” of permanent dialogue efforts by our technical teams so that the agreement improves investment conditions between both countries.

While the Chilean North American Chamber of Commerce (AmCham) described the approval as a “very relevant” step, which “allows us to be optimistic” that the agreement will be approved this year.

“As representatives of US investments in Chile, we see that the non-double taxation treaty is essential to continue promoting investment and trade between the two countries, with the positive impact that this has for the sustainable and inclusive development of Chile and the United States” they concluded.