Unlocking Opportunities: United States – Chile Tax Treaty Implications for Transfer Pricing Strategies

The recent U.S.–Chile Tax Treaty, effective since December 2023, marks a turning point for both U.S. and Latin American businesses. Beyond American companies operating in Chile, the treaty opens the door for LATAM groups with operations in the U.S. to gain greater tax certainty, reduced double taxation risk, and potential tax savings.

Key highlights:

• Reduced withholding rateson interest, royalties, and capital gains.
• Prevention of double taxationand increased cross-border investment stability.
• Opportunities for labor mobility, easing the movement of professionals between both nations.
• Chile positioned as a regional hubfor LATAM businesses trading with the U.S.
• From a transfer pricing perspective, taxpayers can now rely on the Mutual Agreement Procedure (MAP)and bilateral APAs for certainty and dispute resolution.

This makes Chile the third LATAM country (after Mexico and Venezuela) to sign a tax treaty with the U.S., further strengthening its role as a key player in international trade and investment.