In 2023, according to figures from the General Treasury of the Republic, $10,921 million was collected under this concept. This year, between January and October, $21,643 million has been collected, while the expected revenue was around 0.05% of GDP annually, equivalent to $118,213 million.
Read the article in Radio Duna.
Nearly two years have passed since a luxury tax was implemented in the country, with a 2% rate applied to owners of helicopters, airplanes, yachts, and cars with a fiscal value exceeding $40 million as of December 31 of each year.
The intention of this measure was to use this revenue to partially finance the Universal Guaranteed Pension (PGU), with an expected collection of around 0.05% of GDP annually, equivalent to $118,213 million, which did not materialize.
In 2023, according to figures from the General Treasury of the Republic, $10,921 million was collected under this concept. This year, between January and October, $21,643 million has been collected.
Does the legislation work?
A few weeks ago, the Tax and Customs Court of Rancagua issued a ruling in favor of Air Ja SpA, annulling a tax charge of $46,190,732 applied under the luxury tax for one of the company’s aircraft, stating that the SII’s actions violated principles of legality and due process established under Chilean law.
Among its arguments, it states that “the absence of a regulation not only makes the application of the tax arbitrary in general, but also constitutes a violation of the law and the aforementioned principles, as it exceeds the regulatory framework established by the legislator”.
This ruling sparked debate over the need for regulations specifying how the law should be applied; however, this possibility was dismissed, arguing that the Tax Compliance Law enacted at the end of last October consolidates several of its terms.
As Carolina Mujica, tax attorney at Arteaga Gorziglia, told La Tercera, “although the new Tax Compliance Law removed the reference to regulations for this tax, the practical application of the reformed tax will determine whether the new wording is sufficient to overcome the obstacles encountered so far”.
Meanwhile, Javier Jaque, Lead Partner at CCL Auditores Consultores, commented that “greater clarity is always advisable. This is because there are doubts regarding market values, whether it applies to used assets, among others, so clarification and a formal ruling would be very welcome”.