Uofficial translation
In accordance with your submission, you enquire about the obligation to issue tax documentation, and to declare and pay taxes in respect of a term contract and payment of carbon credits generated by forestry plantations, received from a company resident in Canada.
According to their presentation, the companies AAA (Canadian company) and BBB (Chilean company) would have entered into a (a Chilean company) have allegedly entered into a business collaboration agreement to jointly develop a forest carbon project and to jointly develop a forest carbon project and share – in equal parts – the net revenues from the sale of emission reductions (ERs – carbon credits) generated by the project (the carbon rights on the forested land are owned by BBB).
Given that the conditions set out in the agreement for the payment have been met, notably that AAA has sold all of the registered emission reductions, the parties agree that AAA will pay BBB the amount consisting of the gross proceeds minus the project costs, whereby the latter grants to BBB hereby grants to AAA termination in respect of any and all obligations it may have with respect to the payment of the proceeds in relation to the payment of the net revenues.
In this regard, it is reported that, from the point of view of the Sales and Services Tax Law (LIVS), No. (LIVS), Article 2(1°) of the LIVS imposes VAT on “sales”, which is understood to mean, as far as relevant, any agreement independent of its
The term “sales” is understood as any agreement, regardless of the designation given to it by the parties, which serves to transfer of ownership of movable tangible property for valuable consideration.
Therefore, considering that the transfer of carbon credits (also known as carbon credits) entail the sale of an incorporeal good, this is not subject to VAT1
and it is not appropriate for BBB is not required to issue tax documentation in respect of the sales of carbon credits.
Likewise, given that between AAA and BBB there is no sale or service transaction, it is not necessary to issue tax documentation for the sales of carbon credits. It being sufficient for BBB to BBB need only issue to AAA any control document that accounts for the income, consistent with the accounting and flows.
For the purposes of the Income Tax Law (LIR), BBB’s net income constitutes income under the terms of Article 2(1) of the LIR. terms of N° 1 of article 2° of the LIR and must be recognised when it is received or accrued. Consequently, it is subject to first category tax and final taxes, and is obliged to file his annual income tax return in April of the year following the year in which the income was obtained, and is subject to the first category tax and final taxes. annual income tax return in April of the year following the year in which the income was earned, and to pay the taxes due, in accordance with the provisions of Articles 65, 69 and 72 of the LIR, without prejudice also to other ancillary obligations, such as, for example, the obligation to pay monthly provisional payments contained in Article 84(a) of the LIR.
of the LIR.
