Chile – United Arab Emirates treaty

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dividends: 5% WHT if the beneficial owner is a company that directly owns -in the last 6 months- at least 25% of the votes of the company paying the dividends, otherwise 10% WHT applies. The lower rates do not apply in Chile with respect to the “Additional Tax”.

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interest: 4% WHT if the beneficial owner of the interest is a bank, an insurance company, an enterprise that regularly conducts finances businesses involving transactions with unrelated parties, and an enterprise that sell machinery and equipment, when the interest derives from indebtedness as part of the sale on credit. Otherwise, 10% WHT applies; and

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royalties: 2% WHT if the royalty derived from the use or right to use of industrial, commercial, or scientific equipment. Otherwise, 10% WHT applies.

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capital gains: 16% on the alienation of shares or other titles representing capital, unless the requirements established for different exceptions are met.

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article 1: "people covered" by the treaty implied "pass-through" entities under the conditions set forth therein.

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article 3 includes the definition of "recognized pension fund" for both parties;

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article 4: the tie-breaker rule states that cases of double residence of companies shall be resolved by mutual agreement. If there is no agreement, the convention will not be applicable;

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article 5: under the concept of "permanent establishment", the treaty reduces the period for activating a PE in the source state for construction projects, installation or supervisory activities (more than 6 months). In addition, the term also encompasses the provision of services by companies through employees or natural persons as commissioned for this purpose by exceeding 183 days in a 12-month period;

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article 5 adds a new definition for "related people" between individuals and companies;

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article 5 establishes a special rule for insurance policies: where the insurance premium is attributable to a permanent establishment of the company located in the other contracting state, the tax applicable may not exceed 5% of the gross amount of reinsurance policy premiums, and 7% in the case of insurance policy premiums;

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article 7: expressly allows the deduction of expenses at the level of the PE, including management and administration expenses, even if they are incurred in a State different than the one where the PE is located;

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article 9: benefits granted to related companies may not be changed after the expiration of the prescription limitations and, in any case, after 6 years. It also contains a rule excluding the application of transfer pricing secondary adjustments, if the original adjustment derives from transactions that are considered fraudulent;

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article 14: Independent personal services. As a general rule, the income is only subject to taxation in the resident State, unless the person has a fixed base in the other contracting state to carry out activities, in which case he/she can only be taxed proportionally to what he/she receives for that concept; or if this person stays more than 183 days in a period of 12 months, applying the same rule for applying taxation mentioned above.