Related-Party Loan Declaration Chile (Declaración de Intereses Partes Relacionadas)

Related-Party Loan Declaration Chile (Declaración de Intereses entre Partes Relacionadas) is a formal written instrument governed by Código Tributario Art. 41 E — introduced by Ley 20.630 of 2012 (Reforma Tributaria) and substantially amended by Ley 21.210 of 2020 (Modernización Tributaria) — documenting financial transactions (particularly loans, guarantees, and cash pooling arrangements) between related parties (partes relacionadas) for transfer pricing compliance before the Servicio de Impuestos Internos (SII). The declaration ensures that intercompany financial transactions reflect arm's-length pricing (precio de plena competencia) consistent with the OECD Transfer Pricing Guidelines, to which Chile committed as part of its OECD membership process completed in 2010.

The legal foundations of transfer pricing regulation in Chile rest within Art. 41 E of the Código Tributario (coordinated by Decreto con Fuerza de Ley N° 1 of 2000 of the Ministerio de Hacienda), which establishes that transactions between related parties must be reported to the SII and must reflect values consistent with those that would have been agreed between independent parties in comparable circumstances (comparable uncontrolled price — CUP — method). Art. 41 E defines related parties (partes relacionadas) broadly to include: entities under common control (control común), parent-subsidiary relationships (relación matriz-filial), entities in which one party holds directly or indirectly 10% or more of the equity, directorship or management, transactions involving residents of jurisdictions considered tax havens under SII Resolución Exenta N° 41 of 2014, and natural persons and their controlled entities.

The Formulario 1847 (Declaración Jurada Anual sobre Precios de Transferencia) must be filed with the SII by June 30 each year by taxpayers whose total related-party transactions exceed UF 200 (approximately CLP 6.8 million at current values) in the tax year. The Formulario 1847 requires disclosure of: related-party identity, relationship type, transaction type (loan, guarantee, service, goods), amounts, interest rates (for loans), and the transfer pricing methodology used to establish arm's-length compliance. The Related-Party Loan Declaration provides the underlying documentation to support the information reported in the Formulario 1847.

The Comisión para el Mercado Financiero (CMF) imposes additional disclosure obligations for related-party transactions on CMF-supervised entities — banks under the Ley General de Bancos (DFL N° 3), insurance companies under Decreto con Fuerza de Ley N° 251, investment fund managers (administradoras de fondos) under Ley 20.712, and securities issuers (emisores de valores) under Ley 18.045. CMF-regulated entities must disclose material related-party transactions in their estados financieros (financial statements) under IFRS 24 (Related Party Disclosures) as adopted in Chile by the CMF through its Normas de Carácter General (NCG). The Bolsa de Comercio de Santiago and Bolsa Electrónica de Chile require listed companies to disclose related-party transactions as hechos esenciales under Ley 18.045 Art. 9 and NCG N° 30 of the CMF.

For intercompany loans specifically, Art. 41 E of the Código Tributario requires that the interest rate on loans between related parties reflect the arm's-length rate — comparable to rates charged between independent lenders and borrowers for similar transactions. Interest paid by a Chilean entity to a foreign related party is subject to Impuesto Adicional (withholding tax) at 35% under Art. 59 N° 1 of the Ley sobre Impuesto a la Renta (LIR), reduced to 4% under certain double tax treaty (convenio de doble tributación) provisions for qualifying interest payments. The SII may recharacterise excess interest (interest above arm's-length rate) as a constructive dividend (dividendo encubierto) subject to the full 35% Impuesto Adicional rate.

A Related-Party Loan Declaration Chile is needed whenever a Chilean taxpayer enters into a financial transaction with a related party that must be documented for SII Art. 41 E compliance, CMF regulatory disclosure, or corporate governance purposes.

The declaration is required when a parent company (matriz) provides a loan (mutuo intercompañía) to its Chilean subsidiary (filial) or vice versa — regardless of whether the transaction is cross-border (with a foreign parent) or domestic (between Chilean entities under common control). Under Art. 41 E of the Código Tributario, the loan terms — principal amount, interest rate, repayment schedule, and collateral — must reflect arm's-length conditions comparable to transactions between independent lenders and borrowers. The Related-Party Loan Declaration documents these terms and the transfer pricing methodology used to establish arm's-length compliance.

The document is essential for Chilean subsidiaries of multinational groups operating in Chile — including subsidiaries of companies listed on the Santiago Stock Exchange (Bolsa de Comercio de Santiago) or the New York Stock Exchange (NYSE), London Stock Exchange, or other international exchanges — that receive intercompany financing from their foreign parent or sister companies. The SII may audit Art. 41 E compliance during routine fiscalización (tax audit) of the Chilean entity's Impuesto a la Renta annual return (Formulario 22), and the Related-Party Loan Declaration provides the contemporaneous documentation required to support the arm's-length rate claimed.

A Related-Party Loan Declaration is needed when Chilean entities provide guarantees (avales, fianzas) for related-party obligations — including parent company guarantees of subsidiary bank debt or vice versa. The guarantee fee (comisión por garantía) must also reflect arm's-length pricing under Art. 41 E, and the declaration documents the guarantee terms and the market-comparable fee rate.

The declaration is required for cash pooling arrangements (tesorería centralizada) between related entities — common in large Chilean corporate groups such as those controlled by the Luksic Group (Antofagasta plc, Quiñenco SA, Banco de Chile), Sigdo Koppers Group, Copec (COPEC SA), or Falabella (Falabella SA) — where intercompany cash balances are centralised and intercompany debit/credit positions accrue interest. Each intercompany balance position constitutes a related-party loan requiring Art. 41 E documentation.

Regulated entities supervised by the CMF — investment fund managers (AFIs) under Ley 20.712 managing Fondos de Inversión — must document related-party transactions including intercompany loans in their quarterly CMF reporting (Estados de Situación Financiera) and in annual reports filed with the CMF under NCG N° 311. The Related-Party Loan Declaration provides the underlying documentation for these regulatory filings.

A valid Related-Party Loan Declaration Chile under Código Tributario Art. 41 E and OECD Transfer Pricing Guidelines must contain the following elements to satisfy SII documentation requirements and to withstand audit scrutiny.

Declarant's Identification: Full legal name (razón social), RUT (Rol Único Tributario assigned by the Servicio de Impuestos Internos, SII), registered address (domicilio comercial), and legal representative (representante legal) of the Chilean entity making the declaration. The entity type — Sociedad Anónima (SA) under Ley 18.046, Sociedad por Acciones (SpA) under Código de Comercio Arts. 424–446, Sociedad de Responsabilidad Limitada (SRL) under Ley 3.918, or Empresa Individual de Responsabilidad Limitada (EIRL) under Ley 19.857 — and its tax classification (contribuyente de Primera Categoría, Segunda Categoría, or empresa acogida al régimen simplificado under Art. 14 D of the Ley sobre Impuesto a la Renta) must be stated.

Related-Party Identification: Full legal name, RUT or foreign tax identification number (NIF / EIN / TIN), registered address, country of tax residence, and the nature of the relationship with the declarant under Art. 41 E of the Código Tributario — including the ownership percentage (porcentaje de participación), directorship or management relationship, or other control ground. For foreign related parties, the applicable double tax treaty (convenio de doble tributación) between Chile and the counterparty's country of residence must be identified — Chile has signed double tax treaties with Argentina, Brazil, Canada, Colombia, Denmark, Ecuador, France, Mexico, Norway, Peru, Spain, Sweden, Switzerland, Thailand, and the United Kingdom, among others.

Transaction Description: A precise description of each related-party financial transaction covered by the declaration — including: the type of transaction (préstamo intercompañía, garantía, cash pooling, factoring intercompañía, arrendamiento financiero), the direction of the transaction (outbound: Chilean entity to foreign/domestic related party; inbound: foreign/domestic related party to Chilean entity), and the legal instrument documenting the transaction (contrato de mutuo, pagaré, Confesión de Deuda, guarantee deed).

Loan Principal and Currency: The principal amount of each intercompany loan in Chilean Pesos (CLP), Unidades de Fomento (UF), or foreign currency (USD, EUR, GBP) with the CLP equivalent at the Banco Central de Chile official exchange rate on the loan origination date. Foreign currency intercompany loans are subject to the Compendio de Normas de Cambios Internacionales of the Banco Central de Chile, which requires registration of certain foreign currency loans above USD 10,000 through the Form Annex N° 4 filed with the Banco Central.

Interest Rate and Arm's-Length Methodology: The agreed interest rate (tasa de interés pactada) expressed as an annual nominal rate, and the transfer pricing methodology used to establish that the rate reflects arm's-length conditions under Art. 41 E. The OECD-approved methods applicable to intercompany loans include: the Comparable Uncontrolled Price (CUP) method comparing the intercompany rate to rates on comparable independent loans; the Cost Plus method; and the Transactional Net Margin Method (TNMM). The SII's Circular N° 23 of 2012 and the OECD Transfer Pricing Guidelines Chapters I and X (Financial Transactions, published 2020) provide detailed guidance. The declaration should reference the benchmark study (estudio de benchmarking) or comparable market data (datos comparables de mercado) supporting the arm's-length rate — typically citing Bloomberg, Thomson Reuters, or SII interbank rates published on the SII website.

Repayment Schedule: The full repayment schedule (tabla de amortización) including: loan origination date, maturity date or demand repayment structure (préstamo a la vista), installment amounts and due dates, and the amortisation method (French, German, or bullet repayment). For revolving facilities (líneas de crédito revolventes), the maximum facility amount, drawdown and repayment terms, and the calculation period for interest accrual must be specified.

Collateral and Security: Any collateral (garantías) provided by either party — mortgage (hipoteca) registered at the Conservador de Bienes Raíces, pledge over shares (prenda de acciones), personal guarantee (fianza), or other security — and the valuation basis for the collateral. The existence and value of collateral affects the arm's-length interest rate determination, as secured loans command lower rates than unsecured intercompany facilities.

SII Formulario 1847 Mapping: The declaration should expressly cross-reference the transaction data to the relevant fields of the SII Formulario 1847 (Declaración Jurada Anual sobre Precios de Transferencia) to facilitate compliance filing. The Formulario 1847 requires disclosure by transaction type code (Código de Tipo de Operación), counterparty country, total annual amount, and the transfer pricing method code used.

CMF Disclosure Reference: For CMF-regulated entities, the declaration should note the applicable CMF disclosure obligations — NCG N° 311 (annual and quarterly financial statements), NIIF 24 (Related Party Disclosures in financial statements), and any hecho esencial notification required under Ley 18.045 Art. 9 for listed company transactions.

forms-legal.com provides this Related-Party Loan Declaration Chile template as a starting reference for compliance officers, financial controllers, and tax advisors. Given the complexity of Art. 41 E transfer pricing rules, OECD Guidelines, and SII audit exposure — including penalties of up to 200% of the tax difference determined plus interest under Art. 97 N° 11 of the Código Tributario for failure to file or false declaration in the Formulario 1847 — both the declaration and the underlying transfer pricing analysis must be reviewed by a licensed abogado tributarista or contador auditor registered with the Colegio de Contadores de Chile familiar with Chilean transfer pricing regulations.