ENTEL S.A.: Information and Payment Instructions for the Substitutive Tax for Final Taxes (ISFUT)

Dear Participants,

Empresa Nacional de Telecomunicaciones S.A. ("ENTEL"), due to the dividend distribution (the "Dividend") agreed on the Annual General Shareholders' Meeting held on April 19, 2022 (the "Annual General Meeting,") has made available for those shareholders that wish to make use of it, a procedure to pay the Substitutive Tax for Final Taxes (this is, a global, supplementary or additional global tax¹) for the accumulated profits in the Taxable Profits Funds ("ISFUT") considered in provisional article 25 of Law 21 210 and the instructions provided by the Internal Revenue Service ("SII").

Considering the above, we wish to inform the following:

• In accordance with provisional article 25 of Law 21 210 and the instructions of the Internal Revenue Service, the taxpayers subject to the first category tax determined based on full accounting records ², that keep at the end of fiscal years 2020 or 2021 a balance of accumulated taxable profits generated until December 31, 2016, may choose to pay the ISFUT with a 30% rate, on the part of or the entire balance, with a deduction as credit of the corresponding first category tax.³ Based on the above, after the deduction of such credits, it is informed that the effective rate on the amount subject to the ISFUT regime of ENTEL is 12.39%.
• The payment of the ISFUT, based on the above, allows to consider the payment of the supplementary or additional global tax as completed, as appropriate, and may be distributed by ENTEL, giving preference to other profits and without being subject to the general orders of allocation considered in the Tax Income Law.
• Considering the above, regarding the Dividend Distribution agreed upon in the Annual General Meeting, ENTEL's shareholders entitled to receive the said Dividend may instruct the Company to pay the ISFUT for the entire or part of the Dividend that corresponds to them, according to the number of shares registered under their name, by midnight of April 02, 2022.
• Those shareholders that decide not to pay the ISFUT will receive the entire Dividend agreed upon in the Annual General Meeting, and the corresponding income will be subject to the general tax rules applicable to these types of income (according to article 14 A No. 4 of the Income Tax Law and Circular No. 73 of 2020, of SII.) The same will apply to those shareholders that have not communicated on time their decision to pay or not to pay the ISFUT to the Company.
• The Shareholders that instruct ENTEL to pay the ISFUT for all or part of the shares under their name by midnight of April 22 of this year will authorize that a 12.39% of the amount of the Eventual Dividend that belongs to them in account for those shares is used by ENTEL to pay for the ISFUT. In this way, these shareholders will be in charge of the payment of the corresponding amount of that tax.
• The previously mentioned shareholders must send the "Payment Instructions for the Substitutive Tax For Final Taxes (ISFUT)" form to the Company by April 26, 2022, at noon. After that date, it will be assumed that those shareholders that have not sent those instructions have chosen to keep their corresponding Eventual Dividend under the general tax regimen applicable to that income.
• These instructions must be completed according to the attached guidelines and emailed to: This email address is being protected from spambots. You need JavaScript enabled to view it. with a copy to This email address is being protected from spambots. You need JavaScript enabled to view it.. 
  1 Article 2 No.11 of the Tax the Income Tax Law. - 2 As in the case of ENTEL - 3 N° 3 of provisional article 25.

Form for the ISFUT payment
option of ENTEL S.A.

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Statement Letter for the ISFUT
Payment Option of ENTEL S.A.

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The information provided in this document has been outlined based on provisional article 25 of Law 21 210 and the information contained in Circulars 43/2020 and 39/2021 and Official Letters 215/2021 and 2762/2021 from the Internal Revenue Service - SII.

The Company does not issue any opinions on the convenience of choosing a specific tax treatment for the issues addressed in this document. It is not responsible for the decisions shareholders may make in those regards. Under no circumstance may this document be understood as tax, financial, accounting, legal, or other advice.

The Company recommends its shareholders to check their tax and legal situation before making any decisions regarding the issues addressed in this document and encourages them to obtain independent advice to make an informed decision.

For more information, please contact
the Shareholders' Service Department.

This email address is being protected from spambots. You need JavaScript enabled to view it.  +56 223 939 003