Last week, the Chilean Senate approved an amended version of the tax reform package proposed by President Michelle Bachelet.  The package passed by the Chilean Senate includes a two-tiered elective regime for taxation of foreign shareholders in Chilean companies.  Foreign shareholders could elect to either face immediate taxation of income earned by the company, at a 25% rate, or taxation at a 27% rate when dividends are actually distributed.  Shareholders residing in countries that do not have an income tax treaty with Chile would instead face a choice between a 35% immediate rate or a 44.45% rate with deferral.  A US-Chile tax treaty is currently awaiting approval by the US Senate.  The modified version passed by the Chilean Senate must go back to the Chamber of Deputies, the lower house of the Chilean Congress, for approval.

The bill may be accessed here (in Spanish).