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Chile Import Regs.: Tariffs and Taxes

Regulations of Chile for special products, prohibitions, restrictions, labeling, documentation, etc.

Chile Import Regs.: Tariffs and Taxes

Postby bridgat » Tue Nov 18, 2008 3:37 am

For qualified US exports under the US-Chile FTA, the tariff rates are either eliminated or substantial reduced for most products. Complete elimination of tariffs will occur by 2018. Over 90% of current US qualified exports have very low or no tariffs. All other taxes remain.

On January 1, 2003, the current Chilean tariff rate is 6% on nearly all products from most countries, although many products from countries with which Chile has trade agreements enter with lower or no duties. The coming-in-to force of the U.S.-Chile FTA reduces the tariff rates substantially (including changes in used equipment tariff surcharges) since January 1, 2004.

The tariff is assessed on CIF value (Cost, Insurance, and Freight). Used goods/products, are currently subject to a 50% tax surcharge on the current tariff rate, signifying a tariff rate of 9% for the used equipment at this time (under US-Chile FTA the surcharge is eliminated). Goods exempt from this additional duty include used ambulances, armoured cars, public-road-cleaning vehicles, mobile homes, prison vans, and cement-making vehicles. For many items comprehended in HS chapter 87 are subject to a 15% tariff (most finished vehicles). On July 2, 2003, the Chilean Senate approved an increase of 1% in the VAT rate to 19%, effective October 1, 2003. The VAT is assessed on CIF + duty.

Exceptions

Exceptions to the standard tariff and tax policies are: certain agricultural products, luxury goods, computers and software. Such commodities as wheat, edible oils, sugar, wheat flour, are subject to a price band to protect local producers. The price band results in raises the effective tax rates on these imports to 34% or more.

Luxury goods are affected by substantial domestic excise taxes ranging from 30 to 70%, viz., liquor, articles of gold, platinum and ivory, furs, high quality rugs, yachts, beer, wine, whiskey, mineral water, cigarettes etc.

Software: To take advantage of special terms of the Uruguay Round, the actual software programs on magnetic media and the accompanying manuals are imported separately. Thus 90% of the value of the software exported is declared as technical printed matter, and as such is not subject to Chile’s import duty. The balance of 9% is declared magnetic media and subject to the current 6% import duty.

Computers enter Chile duty-free.

Imported automobiles are also subject to luxury tax (85 percent on the value above $15,834.65 (as of 2003), which is adjusted annually for U.S. inflation) and engine size (a sliding scale--this is being phased out). Other imported luxury goods such as yachts, some types of jewelry, furs, and others are also subject to a 50% luxury tax. Duties on capital goods purchased for use in export production may be deferred for a period of seven years and waived under some circumstances.

Tobacco products—cigarettes, cigars and processed tobacco—are affected by additional 60.4%, 51% and 57.9% taxes, respectively

Imports are subject to the same 19% Value Added Tax (VAT) as are domestic goods. This represents an increase of 1% in the VAT rate effective October 1, 2003.

Taxes on Distilled Beverages

Law 19.716, issued February 2001, establishes an ad valorem tax rate of 27% for all liquor, which will take full effect in March 2003 following a transition period during which the rates for the different categories of alcoholic beverages (PISCO, a popular local liquor, WHISKEY, and OTHERS) gradually converge. The tax rate applicable to Pisco is 27% from the date of publication of the law, while the rates on whiskey and other alcoholic beverages will be gradually reduced until reaching the same level.

Taxes on alcohol are the following as of July 2002:
13% for non-alcoholic drinks, natural or artificial
15% for wines, Champaign, chicha, cider and beer
27% for grape pisco and similar beverages
28% for liquors, including aguardiente and liquorice wines similar to vermouth.
30% for whisky

Price band system and Tariff Quotas

Chile maintains a price band system for third parties in regard to various edible vegetable oils, sugar, wheat, and wheat flour. Average tariff rates in 2003 for these products were 6% wheat, 4.2% vegetable oils, and 40.63% for sugar.

Chile also maintains MFN quotas only on refined sugar, with an "out of" quota rate of 40% (as of March 2003) and an "in quota" rate of 0%. The quota of 60,000 tons annually, is allocated on a first come, first serve basis with 21,000 tons reserved for Argentina, 16,700 tons for Guatemala, 9,700 tons for Brazil, and 12,600 tons for other countries.

Capital Goods

Capital goods for foreign investment purposes may be exempted from the VAT if they are imported under Chile's Foreign Investment Statute (Decree Law 600) of 1974, or if there is no local production or "insufficient" local production of the imported good.
bridgat
 
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