The Republic of Austria and the Republic of Chile entered into a new Convention on the avoidance of double taxation in respect of taxes on income and on capital.
The maximum withholding tax rates stipulated in the treaty are as follows:
Article 10 – Dividends
15% of the gross amount of the dividends
Article 11 – Interest
(i) 15% of the gross amount of the interest
(ii) 5% of the gross amount of the interest derived from:
a) Loans granted by banks and insurance companies
b) Bonds or securities that are regularly and substantially traded on a recognised securities market
c) Sale on credit paid by purchase of machinery and equipment to a beneficially owner that is the seller of the machinery and equipment
The convention is already into force and has effect in respect of taxes for any fiscal year beginning on / after 1 January 2016
Impact on investors: The new DTT between Austria and Chile will create a more favorable tax environment for eligible investors from both countries.