Chile Forum

Chile was formally admitted to the OECD as an active member.


http://online.wsj.com/article/BT-CO-200 ... 09508.html

Any thoughts on what it means?

Well, for one they eliminated the bank secrecy laws for the OECD on sharing tax information:
http://www.oecd.org/document/50/0,3343, ... _1,00.html

That sucker went in to effect yesterday.

As I stated before, eventual total tax and financial transparency to the governments of the citizens of member countries.

As a return, Chile has the insider perks of being a card carrying member of the club and claim national financial first world status though domestically not.

Congrats to oregon woodsmoke on Sat Dec 05, 2009 5:25 pm who first posted on this topic:
topic3636.html

We had a quick look over the new law. They have to ask your permission on checking account disclosures, or they have to go to court. Then the judge must justify the disclosure, if they grant it. It is not like say the U.K. or the U.S. IRS gets to go wading through all the banks paperwork in Chile. The request has to be for very specif accounts and transactions.

All they did was provide a mechanism to share the info. It still very much falls under the 'good luck trying to get any of that info in this lifetime' category. I could see some poor sap at the IRS being tasked with requesting a transaction information in Chile waiting a year or more. They better be fairly serious about going after something big, because it is going to cost them a fortune to do it in time and money. My guesstimate is that any give transaction information would likly cost them at least 3 months and $100,000 or more to request. So I don't think there is going to be any random fishing expeditions going on any time soon.

Look out for tax increases! OECD's main (only?) goal is to limit competition by imposing stupid regulations to protect so called "tax base". It is quite hard to compete when you have 50% tax burden on your own population and your competitor doesn't even have income tax (like Uruguay before july 2007).

Yep, the introductory agreement is nothing compared to how it will expand.

Ignore the agreement. What you want to read is the liberalization agreements that Chile agrees to in the initial agreements, accept where members have filed reservations allowing them to disagree.

It is all very agreeable until someone decides to disagree.

Seriously though, I read through most of them. The U.S., the E.U., and Canada of course manage to weasel out of all the commitments on the bases that they have no authority over their individual States. It would be like Chile saying that all of the regions do not have to comply with the OECD because they are independent members..

The U.S., the E.U., and Canada of course manage to weasel out of all the commitments

U.S., the E.U. and Canada are strong players. I don't think that small chilean economy will be able to withstand economic and political bullying, since this is the way to push all this "anti-harmful-competition"[1] nonsense down the throat. In my humble opinion...

[1] http://www.heritage.org/research/taxes/BG1395.cfm

One of the important things I see is that Chile will have to destine much more resources to province cities to make them pick up some growth. So far and for too many years most of the investment from government or private is done in Santiago, I think it’s time to decentralize that monster city. Cities like Valparaiso, Vina, Concepcion, Osorno and many more need a push in the job market.

WASHINGTON – Consistent with its efforts to expand the U.S. tax treaty network in South America, the U.S. Department of the Treasury announced today the conclusion of the negotiation of a comprehensive bilateral income tax treaty with Chile.

The new tax treaty would provide certainty and stability of tax treatment for U.S. and Chilean cross-border investors. The new tax treaty also provides for reductions in source-country taxation of cross-border payments of dividends, interest, and royalties; the full exchange of information between the tax authorities of the United States and Chile; and a comprehensive limitation on benefits provision aimed at preventing the abuse of the tax treaty by third-country investors.

The new tax treaty with Chile is scheduled to be signed by both countries in February. If approved by the U.S. Senate, the treaty with Chile would be only the second U.S. tax treaty with a South American country.

Look out for tax increases! OECD's main (only?) goal is to limit competition by imposing stupid regulations to protect so called "tax base"

I agree with you there Mariusz; this is just another way for the US to have more control over our economy.

Did anyone know that the US has a secret agreement to access oil and other resources in Haiti?