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.
As with any other contract, general rules of interpretation are crucial to ascertain the scope and reach of arbitration agreements. The Supreme Court recently missed the chance to provide a sharper and more sophisticated decision concerning the applicable legal rules of interpretation of arbitration agreements, which is a crucial matter for the uniform enforcement of international commercial arbitration agreements.
The latest reform of the Competition Statute introduces a preventive control procedure for merger operations that have effects in Chile. As of June 1 2017 the national economic prosecutor will undertake a control procedure for merger operations before they begin. The amendment aims to provide legal certainty and reduce the length of merger control procedures.
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.
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.
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.
Law 20,954, which amends the Corporations Act in Law 18,046, was recently published in the Official Gazette. The amendment provides that custodians of shares in public companies that hold shares on behalf of other parties must provide the Securities and Insurance Commission with the identity of those parties. Banks that act as custodians must report this information to the Superintendence of Banks and Financial Institutions.
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.
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.
The securities and insurance regulator (SVS) recently published for comment the fifth version of its methodology for determining the risk-based capital of insurers. The latest version ‒ as well as the conceptual bases developed by the SVS for analysis, discussion and improvement ‒ includes a number of changes from the previous version and will be subject to public consultation until July 31 2017.
The National Economic Prosecutor's new Guidelines on Leniency in Cartel Cases recently entered into force. The guidelines aim to strengthen leniency in cartel cases, allow more cases of collusion to be uncovered, enable the collection of evidence that assists in proving collusive conduct and identifying the parties involved, and provide certainty to individuals or companies engaged in collusive conduct that wish to obtain leniency benefits.
The Labour Reform Law 20,940, which was introduced in April 2017, focuses on reforming union rights. A centrepiece of the reform is the removal of an employer's right to replace personnel who go on strike with other workers. This amendment means that Chile is one of the only countries within the Organisation for Economic Cooperation and Development to remove this rule.
The autonomy of parties to agree on an arbitral procedure is a basic principle of international commercial arbitration. However, parties occasionally try to deny the recognition of awards issued according to agreed rules, claiming that they are unfair or contrary to due process. A recent Supreme Court case on this matter helps to circumscribe the concept of 'proper notice' and protects parties' procedural autonomy, which will ensure the continuing development of international commercial arbitration.
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.
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.
Labour Reform Law 20,940 primarily concerns collective bargaining and the power of unions. A key issue introduced by the law was the elimination of employers' right to hire replacement workers during labour strikes. This restriction will have a paralysing effect on companies, as unions have seen their negotiating position strengthened. Further, there is no clear penalty for illegal strikes. These changes could damage the culture of dialogue in the context of industrial disputes.
Congress recently approved a bill to replace the Superintendence of Securities and Insurance, the securities and insurance watchdog, with the newly created Financial Markets Commission. The commission will have the same authority in the financial and insurance markets as its predecessor, as well as improved powers, particularly regarding investigations and the application of penalties.
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.
Changes were recently introduced to Chile's antitrust regulation, including a mandatory M&A review by the National Economic Prosecutor's Office, a ban on interlocking directorates and mandatory notification of cross-ownership between rival firms. These changes will have a significant impact on firms in the short term. The new administrative duties that the act imposes are preventive in character and align Chile's antitrust regulations with international practice.
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).