Company: SQM
Filing Date: 2025-04-24
Form Type: 20-F
Source: 0000909037-25-000020
Chunk: 195

Company: CHEMICAL & MINING CO OF CHILE INC
Filing Date: 2025-04-24
Form: 20-F
Item: Item 10
Chunk 195
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 to prevent double taxation with Chile in effect or such treaty was signed before January 1, 2020 and until December 31, 2026, even if not yet in effect. In such case, 100% of the Chilean corporate income tax paid by the company may be applied as a credit against the shareholder’s taxes payable on dividends.
As a result of the foregoing, foreign shareholders who are residents of a jurisdiction without a tax treaty will be subject to a higher effective tax rate on dividends than residents of jurisdictions with tax treaties.
In the case of U.S. investors, a tax treaty between the United States and Chile (the “Chile-U.S. Tax Treaty”) was signed prior to January 1, 2020. On December 19, 2023, the procedure for its entry into force was concluded. The Chile-U.S. Tax Treaty entered into force on January 1, 2024. However, in the case of withholding taxes applied by the income-generating country, the Chile-U.S. Tax Treaty shall apply to amounts paid or earned on or after February 1, 2024.
Under the provisions of the Chile-U.S. Tax Treaty, in the case of dividends paid from Chilean companies to their investors
domiciled in the United States, the rate of the Withholding Tax will be 35%, and this shall have the right to credit 100% of the corporate tax paid for profits from which those dividends are distributed.
Cash dividends paid by the Company with respect to the shares, including shares represented by ADRs held by a U.S. Holder (as defined below), will be subject to a 35% Chilean withholding tax, excluding the income tax, which is withheld and paid by the Company (the “Withholding Tax”). The effective rate of Withholding Tax imposed on dividends attributed to 2023 earnings of the Company and distributed during the same period was 23.90411 %.
Capital Gains
Gains from the sale or other disposition by a foreign holder of ADRs outside of Chile will not be subject to Chilean taxation. The deposit and withdrawal of the shares in exchange for ADRs will not be subject to any Chilean taxes.
The tax cost of the shares received in the ADR exchange (repatriation) will be the acquisition value of the shares. Shares exchanged for ADRs are valued at the maximum price at which they are traded on the Chilean Stock Exchange on the date of the exchange or on any two business