Next January 27th will be one year since the enactment of Law 21,420, known for eliminating or reducing certain tax exemptions in order to finance the Universal Guaranteed Pension. During this year of validity, the tax system has faced the changes established by this law, but is still pending the tax indicated in its article 9.
Article 9 of Law 21,420 creates a new tax on certain goods considered luxury due to their high commercial value, which the Chilean Internal Revenue Service (SII) will charge for the first time in April 2023.
What is this new Tax?
Corresponds to a fixed rate tax of 2% on the current market value of the following assets that are registered in Chile, before the corresponding entity, as of December of each year:
- Helicopters and airplanes, manned, weighing more than 160 kilos and that have a current market value equal to or greater than 122 UTA ($89,533,848 as of 12.31.2022).
- Yachts that have a current market value equal to or greater than 122 UTA ($89,533,848 as of 12.31.2022).
- Automobiles, station wagons and similar vehicles that have a current market value equal to or greater than 62 UTA ($45,500,808 as of 12.31.2022).
The tax must be paid by the owner of the property or assets in April of the following year, that is, if there´s one or more taxed assets as of December 31st, it must be payed 2% on the current market value of said assets as of December 31st.
In the event that the luxury good has more than one owner, the tax will be transferred to only one of them.
The SII will be responsible for determining the current market value of the assets indicated in December of each year, publishing the list of values on its website. In the case of values as of December 2022, the SII already disposed of the Payroll Tax on Planes, Helicopters, Yachts and High-Value Vehicles.
Notwithstanding the foregoing, the same article 9 contemplates the following exemptions to the application of the tax:
- Those assets that are owned by the Treasury or Municipalities.
- Assets that are owned by companies that carry out activities of numbers 1 (real estate), 3 (industry, commerce, mining, other extractive activities and others), 4 (brokers, commission agents, auctioneers, customs agents, shippers and others), and 5 (other income not indicated). Additionally, the goods must be used for the development of said activities and be essential.
The yachts that, fulfilling the previously indicated requirements, also fulfilled the following copulative requirements as of December 31st of the year prior to the accrual of the tax: i. That have the sail as their main means of propulsion. ii. That they are used by athletes in their sports activities. Thus, for example, an airline that uses the planes it owns to transport passengers, the yachts used for sporting fines that meet the indicated requirements and/or cargo, or the Ministry of National Defense, will not be affected by this tax for the helicopters it owns.
Regulations and instructions:
Ley 21.420 – Article 9
Circular 57 del 2022 – Gives instructions
Resolución 124 del 2022 – Creates the current price record for helicopters, planes and yachts.
Resolución 125 del 2022 –Instructs on the transfer and payment of the tax.