Chilean ADRs not subject to new indirect transfer tax

August 2013

Overview

The Chilean IRS has confirmed that the indirect transfer rules that were introduced in 2012 will not apply to the trading of Chilean company American Depositary Receipts (ADRs).

The Chilean IRS additionally has reconfirmed that capital gains arising from the disposal of ADRs should not be subject to Chilean income tax provided that both the transferor and the depositary bank for the ADRs are neither domiciled nor tax resident in Chile.

US individuals, MNCs and Investment Funds holding ADRs of Chilean companies should consider the provisions of Ruling 1307 in connection with any future sale or disposition of the ADRs.

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