Emerging Markets Rates and Currencies Handbook

Capital Flow and FDI Portfolio investors can repatriate funds with no restriction, FDI falls under Chapter 14 which is part of the Compendium of Foreign Exchange Regulations from the BCCH. The types of investments regulated through this Chapter are: Injection of Capital, Investments, Deposits and Offshore Loans. Additional Comments There are no regulatory restrictions to hedging forecasted transactions. If forecasts change, companies will have the typical flexibility associated with derivatives (unwinding, restructuring, etc.) Hedge accounting is attainable as per IFRS guidelines. Citi Chile El Bosque Norte 500 Piso 7 Las Condes Santiago, Chile FX Sales Contact: +562 2430 9515 +562 2430 9525 Tax Summary – Chile Chile Country Tax Deductibility and Considerations Inter-Co Debt Offshore Derivatives Equities W/H Tax • 35% WHT unless FI • 4%WHT if loan granted by FI. This rate does not apply if the loan granted under a structured agreement . • Lower rates may be applicable under Double Taxation Treaties. • Interest levy with rates under 35% are subject to excessive- indebtedness rules • 4% WHT. • In back-to-back + structured agreements operations it returns to 35%. • Excessive- indebtedness rules non applicable for banks/FI as borrowers (non related) • No WHT • Onshore: No WHT • Offshore: Compensation: None. Others: premium, fees = 35% • 35% WHT on dividends (minus corporate tax credit). Full credit in case of Double Taxation Treaty recipient and 65% of corporate tax in other cases. • 35% WHT on capital gain. Lower rates may be applicable under Double Taxation Treaties. • Since September 1st in listed shares sales, 10% withholding tax on the capital gain, unless the seller is an institutional investor. Deductibility of interests • Interest is deductible to the extent they relate to income generating activities. • Fully deductible to the extent they relate to income generating activities • Fully Deductible • N/A Bank Loans Offshore Local Borrowing