latin america in focus newsletter

Noticias

Latin America in Focus

Staying ahead of cross-border operations

Latin America's emergence as a world market has been, and continues to be, accompanied by an upsurge in the complexity of laws, regulations, and practices impacting cross-border operations throughout the region. Latin America in Focus shares the latest developments with consequences for the region's tax, legal, and overall business environment—developments that businesses and individuals with investments in Latin America cannot afford to ignore.

Click on any of the headings below to read more about the topic.

Argentina

Voluntary disclosure regime and tax amnesty introduced

A law introducing a voluntary disclosure regime and a tax amnesty that will allow Argentine residents to declare unreported assets and pay tax at special rates, as well as reduced interest and penalties, was published in the official gazette on 22 July 2016.

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Brazil

Ultimate beneficiary disclosure required

Certain domestic and foreign legal entities are required to disclose to the tax authorities the complete chain of ownership up to the ultimate beneficiaries, as well as the legal representatives of owners.

Withholding tax reduction for cross-border payments related to travel converted into law

Provisional Measure No. 713/2016 that temporarily reduces the 25% withholding tax rate to 6% on payments remitted abroad by Brazilian resident individuals to cover personal expenses incurred during overseas travel, was converted into Law 13,315/2016 and published in Brazil’s official gazette on 21 July 2016.

New guidance on electing method changes for taxing forex gains/losses

Brazil's tax authorities issued new guidance on 2 August 2016 that amends the procedures by which taxpayers may elect, under certain conditions, to change their method of taxing foreign exchange gains/losses from the accrual basis to the cash basis.

Ruling issued on tax treatment of software licensing fees

Brazil’s tax authorities issued a ruling on 17 June 2016 on the withholding tax treatment of software licensing fees under the royalties article in the Brazil-France tax treaty.

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Chile

New regulation opens opportunity for foreign investment

On 27 July 2016 Chile’s Superintendence of Securities and Insurance issued a regulation that clarifies the definition of “institutional investor” for purposes of the rules governing regulated investment funds.

Electronic portal opened for taxpayers to elect into new tax regimes

Eligible taxpayers subject to first category income tax must opt into one of two new dual income tax regimes before the end of 2016; otherwise, a default election will apply.

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Colombia

Guidance issued on application of thin cap rules

A ruling clarifies the thin capitalization rules and the scope of the term “interest” for purposes of the regime.

Guidance issued on transactions involving transfers of Colombian assets between foreign entities

Interpretive guidance clarifies when a merger or spinoff transaction in which Colombian assets are transferred between foreign entities will be subject to income tax.

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Costa Rica

TIEA network expanding

Costa Rica’s tax information exchange agreement (TIEA) with Ecuador has been approved and a new TIEA with Italy has been signed.

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El Salvador

Tax treatment of interest paid on foreign financing

El Salvador-resident companies that make interest payments on financing arranged with foreign institutions or entities must comply with domestic income tax withholding and VAT reporting obligations.

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Mexico

Fibra E rules revised

Mexico’s tax authorities issued revised rules for the FIBRA E regime on 1 April 2016 to clarify and expand certain aspects of the regime launched on 29 September 2015.

Law enacted to introduce special economic zones

A law that became effective on 2 June 2016 creates special economic zones (SEZ) in Mexico that will offer tax, customs duty and administrative and regulatory benefits to companies setting up in the zones.

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Panama

Country moves toward adoption of CRS

Preparations for the adoption of the OECD’s common reporting standards have begun, and Panama has commenced negotiations with other countries to adopt agreements on the automatic exchange of information.

Convention on mutual assistance planned to be signed

On 15 July 2016, Panama’s government announced its commitment to sign the Multilateral Convention on Mutual Administrative Assistance in Tax Matters.

Contact us

For more information, please contact the Americas Tax & Legal Hub.

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Note: Latin America in Focus is not intended to be an inclusive update for all Latin America countries but rather features key developments for applicable countries as available.

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