Last week, the US Senate Foreign Relations Committee approved the Tax Treaty with Chile. The next step consists of approval by the full Senate, which should happen within the next few months. 

The approval of the Tax Treaty, pending since 2010, would be very good news for Chileans who invest or plan to do so in the United States, as well as to promote the investment of US capital in our country, since it will facilitate capital flows and will reduce investment costs between both countries. 

Among others, the Treaty reduces applicable withholding taxes on interest, from 35% to 4% or 10%, depending on the case, and considers a transition period in which a rate of 15% will apply. Also, royalties will be subject to a 2% or 10% rate, depending on the type of intangible. Regarding capital gains, the rate will depend on the type of asset to be sold and, in the case of shares, a rate of 16% will be applied, with certain exceptions for pension funds, institutional investors, sales of shares with a stock market presence or majority stakes (over 20% stake).