A taxable person asked the Chilean tax authorities to decide whether a branch of an undertaking established in a third country must be regarded as established in the United Kingdom in order to benefit from the advantages granted under Article 7 of the Chilean-British Double Taxation Convention. We have a collection of global double taxation treaties in English (and other languages, if available) to help members ask questions. If you are having trouble finding a contract, please call the application team on +44 (0) 20 7920 8620 or email us at email@example.com. Following an earlier analysis and the information provided by the applicant, the tax service considered, inter alia, that the branch was not regarded as a `resident person` for the purposes of the application of the Chilean-United Kingdom double taxation convention, given that, as regards the possibility of double taxation raised by the applicant, the tax service considered that this situation was an example, what can happen if countries do not have double taxation treaties, as in the case of Chile and the United States? Since the agreement signed between Chile and the United States is not in force, the elimination of double taxation depends on US legislation or the UK double taxation convention. The taxpayer stated that he was reviewing an investment by acquiring shares abroad. In that context, it had entered into a contract with a foreign entity established in a third country (the United States) to protect itself against future currency fluctuations through its branch in the United Kingdom. According to the taxable person, the branch was considered to be a permanent establishment within the meaning of the double taxation convention between the United States and the United Kingdom and was subject, in the United Kingdom, to corporation tax on the income attributable to it. Article 3 of the Chilean-British Double Taxation Convention defines a “person” as “a natural person, a company and any other body of persons”. Once it has been established which party is invoking the benefits of a contract, it is necessary to determine where that person resides. To be a resident of a Contracting State in accordance with Article 4 of the Chilean-British Double Taxation Convention (and a double taxation convention signed by Chile on the basis of the OECD and UN models), if you use the HMRC intranet, the agreement can be viewed in the sidebar via the link “New contracts/protocols in force”.
On HMRC`s website, the search for “contracts in force in Chile” will provide a link to the contract. On the basis of the above considerations and Articles 1, 3, 4 and 5 of the Double Taxation Convention between Chile and the United Kingdom, the tax service concluded that the person who received benefits under the Convention was established in a third country and that his branch or establishment in the United Kingdom did not qualify as an employee established in the United Kingdom in under the agreement. Therefore, she was not entitled to contractual services. 1. A company resident in a State with which Chile has concluded a double taxation agreement may avail itself of the advantages of this Agreement, notwithstanding the fact that the income in question is attributable to a permanent establishment which it owns in a third country, except in the case of abuse or abuse of tax treaties. The text of the tax convention is www.gov.uk/government/publications/chile-tax-treaties A comprehensive agreement (SI 2003/3200), as well as an exchange of notes to be read with the agreement, entered into force on 21 December 2004 and has effect: the taxpayer has informed the tax authorities that its UK branch has been classified as a permanent establishment under the UK Double Taxation Convention. Thus, the tax department relied on the definition of a permanent establishment in Article 5 of the Chilean double taxation conventions (based on elements of the OECD and United Nations models). .
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