Chilean Stock Tax Reforms Welcomed

by Jason Gorringe, Tax-News.com, London

14 November 2001

Newly introduced reforms to the capital gains tax regime in Chile have been widely welcomed, and are expected to boost the country's stock market considerably.

The Chilean government recently announced that highly traded stocks would be exempted from the 15% CGT levy, in a move which it is hoped will increase liquidity, and improve investment opportunities in the capital markets for both foreign and domestic investors.

According to Alicia Dominguez, a tax partner for international consultancy firm Arthur Anderson, the exemption has been applauded by investors and companies alike, despite the fact that of the 300 organisations listed on the Chilean stock exchange, only around 80 are highly traded.

'It's excellent legislation and consequently it's been very well received by all of the markets- political and economic, for instance,' she explained to the financial press earlier in the week. 'It benefits the eligible companies, and also investors and individuals.'

The government initially announced its intention to reform the country's tax system in April, although the Chilean President, Ricardo Lagos, said in October that the process would be a necessarily slow one.

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