# Plain Language Summary: Supporting the Chilean Tax Treaty

The U.S. House is asking the Senate to approve a tax agreement with Chile that was signed back in 2010 but never officially ratified. Think of ratification as the final stamp of approval that makes the treaty legally binding and enforceable. Right now, this treaty is stuck in limbo, and American companies doing business in Chile are paying the price for it.

Here's the practical problem: Chile changed its tax laws in 2014 and raised corporate tax rates significantly. Without this treaty in place, American companies operating in Chile will face tax rates as high as 44.45 percent by 2027. Meanwhile, companies from 35 other countries—including China—already have tax treaties with Chile that lock them into a much lower 35 percent rate. This puts American businesses at a serious disadvantage when competing internationally. A company from Germany or Japan gets a better tax deal than a company from the United States, which doesn't make sense when we're supposed to be partners with Chile.

The resolution emphasizes that the U.S. and Chile have strong ties, including a free trade agreement from 2004 that eliminated tariffs between our countries. They're even celebrating 200 years of diplomatic relations in 2023. The two countries trade nearly $39 billion in goods and services annually, so this isn't a small relationship. The Senate's Foreign Relations Committee has already approved this treaty multiple times since 2014, most recently in June 2023. This resolution is essentially Congress saying: "Let's finally get this done and level the playing field for American businesses in Chile."

Supporting the ratification of the Chilean tax treaty.

Connolly, Gerald E.

 <p>This resolution recognizes the long-standing United States-Chile partnership. It also (1) reaffirms the importance of expanded bilateral economic ties for advancing the prosperity of both countries, and (2) urges the Senate to provide its advice and consent to ratification of the bilateral tax treaty with Chile.</p>