Foreign companies looking to sell their products or solutions
into Chile tend to favor doing so (at least initially) without
incorporating a company. From a business perspective, it makes
sense since companies want to limit risk and expenses when opening
new markets. The way to do so previously was to find an agent,
distributor or another established company that could represent the
company in Chile.
What many companies do not realize is that these relationships
can sometimes lead to a permanent establishment
(PE). If a foreign entity is found to hold PE in
Chile, they will be subject to the same taxes as Chilean
taxpayers.
New Scope of Permanent Establishment.
Generally speaking, the Chilean Income Tax Law does not have a
definition of "permanent establishment". Article 58
N° 1, only gives examples of what may be considered as PE for
Chilean tax purposes describing them as branches, offices, agents
or representatives.
