India-Chile DTAA, India's newest LatAm bilateral.

The India-Chile Double Taxation Avoidance Agreement was signed on 9 March 2020 and entered into force in 2022. It is India's first comprehensive income-tax treaty with a Pacific Alliance country and reflects Indian interest in Chilean mining (lithium, copper), agribusiness and renewables, as well as growing Chilean sovereign-wealth and family-office interest in Indian equity and infrastructure.

The treaty's rates and architecture are modern-OECD-aligned — low source-country withholding, make-available FTS, PE-based business profits, LOB and PPT built in from day one (not retrofitted via MLI).

Article 10 (Dividends): cap of 10% where the beneficial owner is a company directly holding 10%+; 15% in other cases.

Article 11 (Interest): cap of 10%. Specific exclusions for government and central-bank debt.

Article 12 (Royalties and FTS): cap of 10%. FTS uses a make-available test similar to the India-UK treaty.

Article 7 (Business profits): standard PE-based. An Indian company with Chilean customers but no Chilean PE is not Chilean-taxable on those business profits.

Article 13 (Capital gains): gains on shares of Chilean companies owning Chilean mining concessions or Chilean real estate may be taxed in Chile under domestic rules; portfolio equity gains follow source-country rules.

LOB and PPT: built into the treaty from inception rather than added via MLI. Chilean or Indian entities claiming treaty benefits must satisfy substance and purpose tests from day one.

Chile holds roughly 40% of global lithium reserves and is a leading copper producer. Indian strategic interest in Chilean lithium concessions has grown with India's electric-vehicle and battery-storage build-out. The India-Chile treaty structures a predictable tax framework for these flows.

Specific points:

• Chilean mining concession gains can be Chilean-taxable even where the holding company is Indian — Article 13 preserves source taxation on real-property-rich entities.
• Chilean mining royalties paid to Indian technology licensors benefit from the 10% treaty cap (Chilean domestic withholding on royalties is 30% without treaty).
• Indian equipment supply contracts to Chilean mining operators: typically Article 7 business profits with no Chilean withholding if no Chilean PE.
• Indian engineering services to Chilean mining operators: FTS classification applies the make-available test. Pure consulting (no transfer of know-how) is Article 7.

For Indian company receiving Chilean source dividend, interest, royalty or FTS:

1. Obtain Indian TRC from Indian tax authority (Rule 21AB).
2. File Form 10F electronically on the Indian income tax portal (also used for inbound-India flows under the treaty).
3. Provide the Chilean payer with the TRC, Form 10F, and treaty invocation.
4. Chilean payer applies the reduced withholding rate under domestic Chilean procedure.
5. Indian company reports the Chilean income and claims foreign tax credit on Indian ITR against Indian corporate tax on the same income (Section 90 read with the treaty).

For Chilean recipients of Indian income: the mirror process using Chilean TRC and Indian Form 10F. The Indian payer withholds at the treaty rate and the Chilean recipient claims FTC in Chile.