Senate approves the US-Chile Treaty with reservations that need to be approved by Chile

In brief

The US Senate approved, on June 22, and by a 95-2 vote, a resolution of ratification of the pending US-Chile Income Tax Treaty (the Treaty) with two reservations and two declarations. The Treaty was signed in February 2010 and has been pending ratification in the United States since then. The reservations now must be approved by the Chilean Congress before the Treaty can move forward toward ratification and entry into force. 

The takeaway: Taxpayers that have operations and payments involving Chile should examine how the Treaty provisions may apply to their activities and prepare for the Treaty’s anticipated entry into force.