Background
Interest paid to foreign or international banks and to foreign or international financial institutions is subject to withholding tax at a reduced rate of 4% on the gross amount paid (instead of the normal rate of 35%).
Until 2001, it was necessary for the financial entity to be approved by the Central Bank to enjoy the reduced rate. This requirement was eliminated by Law 19,768 of 2001.
Definition of financial institutions
The tax administration (SII) h…