Marketable securities are restated by the fluctuation of the consumer price index, and they must be written down to market value if lower. Inventories are valued at the latest purchase price or direct manufacturing cost, excluding overhead. LIFO is not allowed. Inventory valuation in Chile is at replacement cost, including only direct labor and raw materials and excluding overhead. The same tax is applicable to imports.
Resident corporations are subject to taxes on their worldwide income.
In general, foreign income and dividends received by a domestic corporation are subject to Chilean taxation in the financial year when accrued or received. A tax credit for taxes paid abroad is granted, subject to the regulations of the Income Tax Law. Branches of foreign corporations are taxed on their income without regard to the results of the head office. Also, stock dividends are not taxed. The accounting and legal systems in Argentina and Chile facilitate foreign investment.