Montt y Cia SA updates

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).

New law extends IP benefits granted to performing artists to directors and scriptwriters
Montt y Cia SA
  • Intellectual Property
  • Chile
  • November 21 2016

A new law has extended the moral and patrimonial rights of performers of audiovisual artistic works to directors and scriptwriters. As a result, directors and scriptwriters now have the inalienable and non-transferable remuneration right established in Law 20,243. Remuneration can be collected through the collective management entity that represents directors or scriptwriters and the amount will be determined according to the rules contained in the Intellectual Property Law.

Taxes to be considered under Brazil-Chile double tax treaty
Montt y Cia SA
  • Corporate Tax
  • Chile
  • October 14 2016

The Chilean Tax Authority recently issued Official Letter 869, which reported that Brazil has published an interpretative law establishing an exemption for social contribution tax on net profits in all double tax treaties to which Brazil is party. As a result, Chilean residents conducting business in Brazil can use social contribution tax on net profits paid in Brazil as a credit against the payment of Chilean income tax.

Taxation of satellite signals
Montt y Cia SA
  • Corporate Tax
  • Chile
  • September 09 2016

A taxpayer recently sought a ruling on the taxation of payments for the broadcasting rights, distribution and marketing of a television signal transmitted via satellite to Chile. The general withholding tax rate for services provided from abroad is 35%, but preferential tax rates of 15% and 20% are available for certain services. The taxpayer inquired whether the 20% withholding tax rate applied, as the provider was resident abroad.

Treatment of employee inventions under industrial property law
Montt y Cia SA
  • Intellectual Property
  • Chile
  • September 05 2016

The Industrial Property Law contains provisions regarding the allocation of IP rights of employee inventions in a number of scenarios, including if an employee is not deemed to perform an inventive or creative task under his or her employment contract and where an employee evidently benefited from knowledge and means provided by the company in the creation of an invention.

VAT on price incentives for public works
Montt y Cia SA
  • Corporate Tax
  • Chile
  • June 10 2016

The Tax Administration recently received a request to rule on whether government incentives in a construction contract were subject to value added tax (VAT). Under the Regulations on Government Contracts, the administration may offer price incentives to contractors that perform public works. Prior to approval, the administration's comptroller consulted the tax authorities regarding the treatment of these incentives for VAT purposes.

New law simplifies tax system
Montt y Cia SA
  • Corporate Tax
  • Chile
  • April 22 2016

The recently published Law 20,899 amends the Income Tax Act, the Value Added Tax (VAT) Act, the Tax Code and other laws in order to simplify the implementation of the tax reforms introduced in September 2014. In particular, Law 20,899 simplifies the interaction between income tax regimes, exempts some new houses from VAT and clarifies the terms of the Tax Code's anti-avoidance rule.

Trademark authorities disagree on protection of product packaging
Montt y Cia SA
  • Intellectual Property
  • Chile
  • April 11 2016

The National Institute of Industrial Property and the Industrial Property Appeals Court have been unable to agree regarding the protection of product packaging. The Industrial Property Act establishes that the shape or colour of products or of the packaging and colour itself cannot be registered as trademarks; however, applicants have found ways to bypass this provision in an attempt to register packaging as figurative trademarks.

Chile signs agreement on automatic exchange of country-by-country reports
Montt y Cia SA
  • Corporate Tax
  • Chile
  • March 04 2016

Chile recently signed the Organisation for Economic Cooperation and Development's Competent Authority Agreement on the Automatic Exchange of Country-by-Country Reports, which requires large companies to report information on each jurisdiction in which they operate. The decision to sign the agreement complements a series of structural measures implemented following the 2014 tax reform, to ensure that the tax base is not artificially manipulated by taxpayers.

Trademark office upgrades to latest version of Nice Classification
Montt y Cia SA
  • Intellectual Property
  • Chile
  • February 01 2016

The World Intellectual Property Organisation recently published the 2016 version of the Nice Classification for Goods and Services. The Chilean Trademark Office announced that the new version of the classification will be applied to all trademark applications and will be available on its website. This move should homologise the criteria applied by the Chilean and foreign trademark offices regarding trademark applications filed in Chile.

Redomiciliation of foreign companies
Montt y Cia SA
  • Corporate Tax
  • Chile
  • January 22 2016

The redomiciliation of companies is not recognised under Chilean law. This means that in order to move to Chile, a foreign company must establish a branch or create a subsidiary there. It cannot move its entire operations to Chile. The question arises of what happens when a company incorporated in one foreign jurisdiction moves to another foreign jurisdiction and whether this change is recognised under Chilean law.

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