Foreign investment rules modified
The Foreign Investment Committee adopted measures to curb the entry of foreign speculative capital and to alleviate the surplus of the capital account and the deterioration of the exchange rate of the US dollar to the Chilean peso.
The minimum investment under Decree Law 600 (Foreign Investment Statute) was increased from USD 25,000 to USD 1 million. The minimum USD 25,000, however, remains unchanged for contributions of tangible assets and technology. The ceiling for the foreign loan component of foreign investment was reduced from 70% to 50%.
New tax credit for costs of training employees
Under Law 19,518, published in the Official Gazette of 14 October 1997, the cost of training programs conducted by enterprises either directly or through training centers may be credited against the first category tax liability. The annual credit is limited to the higher of:
- 1% of the payroll; or
- 13 monthly tax units.
If the training is provided to workers earning between 25 and 50 monthly tax units, only 50% of the costs are eligible for the credit. If the training is provided to workers earning more than 50 monthly tax units, only 15% of the costs are eligible for the credit.
The limits of credits are increased by 20% for enterprises with training programs managed by committees representing both the enterprise and its employees.
A taxpayer may, in addition, receive:
- a monthly bonus equal to 40% of the monthly minimum salary per apprentice worker during the first 12 months of the contract to finance training in the enterprise; and
- an additional bonus of up to 10 monthly tax units per apprentice worker to finance related training.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
For further information contact Anthony Cook, Deloitte & Touche, Santiago, Chile on Tel: +56 2 638 4186, Fax: +56 2 639 1522.
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