SQM subject to new tax

Santiago — Sociedad Química y Minera de Chile S.A. (SQM) said Oct. 15 that it is subject to the obligations of the Chilean Income Tax Law including, when applicable, the payment of the corporate income taxes established by such law. On Sept. 29, 2014, Law 20,780 was published in the Official Gazette. This law modified the Chilean Income Tax Law and introduced a progressive increase in the First Category Tax, which will reach a rate of 25 percent beginning in 2017, subject to the application of the Attributed Income System or a rate of 27 percent beginning in 2018, subject to the application of the Semi-Integrated System. SQM said it will be will be affected by these modifications regardless of which of the two systems it chooses to apply. In accordance with International Financial Reporting Standards (IFRS), SQM said it must immediately recognize, in its consolidated statements of income, the effect that this increase will have on its deferred tax liabilities. SQM estimates that the effect, under the Semi-Integrated System, will be between US$55-$60 million. Once the final amount has been determined, it will be recognized and charged to profit in SQM’s interim consolidated financial statements for the third quarter of 2014, which will be published during the month of November 2014.