Company: AKO-B
Filing Date: 2025-03-26
Form Type: 20-F
Source: 0001410578-25-000473
Chunk: 148

Company: ANDINA BOTTLING CO INC
Filing Date: 2025-03-26
Form: 20-F
Item: Item 10
Chunk 148
---
 the conversion of ADRs into shares of common stock, and the immediate sale of the shares for the value established under the Deposit Agreement, will not generate a capital gain subject to taxation in Chile. However, in the case where the sale of the shares is made on a day that is different than the date in which the conversion is recorded, capital gain subject to taxation in Chile may be generated. In connection thereto, on October 1, 1999 the SII issued Ruling No. 3,708 whereby it allowed Chilean issuers of ADRs to amend the deposit agreements in order to include a clause that states that, in the case that the exchanged shares are sold by the ADRs’ holders on a Chilean stock exchange either on the same day in which the exchange is recorded or within the two business days prior to such date, the acquisition price of such exchanged shares shall be the price registered in the invoice issued by the stock broker that participated in the sale transaction. As this amendment has been included in the Deposit Agreement, the capital gain that may be generated if the date of conversion is different than the date of sale, would not be subject to taxation, to the extent that the SII’s criterion is maintained and the contributor in good faith adopts this criterion, which the contributor must certify to the satisfaction of the authority in case of observation.
The distribution and exercise of preemptive rights relating to the shares of common stock are not subject to taxation in Chile. Any capital gain from the sale or assignment of preemptive rights will be subject to general taxation.
Chile / United States Double Taxation Treaty
The current income tax treaty between Chile and the United States (the “Treaty”) entered into force in December 2023, and the following are among its tax effects:

●   The Treaty (art. 10) establishes maximum withholding rates on dividends paid between the contracting states (maximum rate of 5% if the beneficiary holds 10% or more of the voting shares of the company paying the dividend and 15% in all other cases). This treaty-established benefit of a lower dividend withholding tax rate will not be applicable as long as Chile maintains its integrated taxation system whereby the First Category Tax is fully creditable in computing any withholding at the source.
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

●   The exemptions that benefit capital gains on the sale of ADRs remain unaffected by the entry into force of the Treaty. Regarding the sale of shares in a Chilean company by a U.S.