DT4855 - Chile: Interest

Chilean tax on interest is reduced to 5 per cent in some cases and otherwise to 15 per cent of the gross amount where the UK resident recipient is the beneficial owner of the interest (Article 11(2)), except where the debt-claim in respect of which the interest is paid is effectively connected with a permanent establishment which the UK resident recipient has in Chile. In the latter circumstances, the provisions of the Business profits Article (Article 7) will apply.

The 5 per cent rate applies to interest derived from loans granted by banks and insurance companies; from bonds or securities that are regularly and substantially traded on a recognised securities market and to sales on credit paid by the purchaser of plant and machinery.