SII joins the Tax Reform against tax evasion

Tax Reform Project extends the duration of control of transfer prices in Chile.

Since the tax reform in Chile, the SII (Servicio de Impuestos Internos – Internal Revenue Service/IRS) has been strengthening its powers to combat tax evasion. In the case of the taxpayers forming part of the same business group and who have carried out transactions for which they are in the process of being audited, the SII may carry out a single procedure that brings together all those who participated in such transactions (economic unit). 

Transfer Pricing

Likewise, the scope of the tax audit has been modified concerning the maximum duration thereof. While the general rule is 9 months, regarding transfer pricing. Additionally, for taxpayers with sales or income over UTM 5000 and operations with related parties, it was 12 months, increasing to 6 months with the Reform Bill. 

On the other hand, those operations with controlled entities abroad and operations with tax havens will be audited with a maximum term of 18 months with a possibility of an extension of 6 months. 

Multijurisdiction

The tax reform incorporates the “multijurisdiction,” i.e., the regional directorates will be able to scrutinize individuals and companies located in different jurisdictions beyond their own. At present, a taxpayer could only be audited by the Regional Directorate of the SII where he/she was domiciled. 

Source: Diario Financiero 08/08/22

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