On September 25, 2024, the National Congress approved the tax reform known as the "Tax Compliance Bill". This initiative, previously reviewed by the Constitutional Court and declared in accordance with the Constitution, is in the process of becoming law, pending only its promulgation by the President of the Republic and its publication in the Official Gazette.
This project brings with it important modifications to the tax framework, with a focus on the voluntary declaration of assets abroad, the simplification of pending judicial procedures and the implementation of new control measures. The main changes included in the reform are highlighted below:
Declaration of Capital Abroad Taxpayers domiciled or resident in Chile before January 1, 2023 may voluntarily declare assets and income abroad, paying a single tax of 12%. This mechanism also allows the declaration of assets located in Chile through foreign entities, without the obligation to repatriate them. Declarations may be made until November 30, 2024.
Advance Termination of Pending Legal Proceedings Taxpayers are enabled to conclude pending tax litigation through the remission of fines and interest, provided that they accept the adjusted debt. This measure, applicable to proceedings prior to January 1, 2024, seeks to expedite judicial proceedings, giving taxpayers the possibility of closing these cases under more favorable conditions.
General Anti-avoidance Rule (NGA) The fight against tax evasion is reinforced through the introduction of new grounds for the application of the NGA, especially in cases of simulation or abuse in obtaining tax benefits. This procedure will be managed by an Executive Committee, which will evaluate and recommend to the Director of the Service whether the case should be brought before the Tax and Customs Courts.
Taxation of Business Groups Business groups must designate a proxy to coordinate with the Internal Revenue Service (SII). This measure will allow a more efficient and unified control of all the companies of the group, preventing inconsistencies and facilitating the integral supervision of their operations.
SII Audit Procedure The audit deadlines are extended and new provisions are introduced to ensure that the SII has the necessary background information to carry out an exhaustive review. Among the new provisions is the application of the NGA when indications of circumvention are detected during the audit.
Bank Secrecy The procedure for requesting information subject to bank secrecy is reformed. It will now be mandatory that the taxpayer expressly authorizes the lifting of the secrecy, with a specific judicial process to manage refusals. In addition, the protection of personal data is reinforced and the penalties for those who violate the confidentiality of this information are increased.
Anonymous Whistleblower The figure of the anonymous whistleblower is introduced for tax crimes, providing legal protection and confidentiality to those who collaborate with the investigation of this type of crime. Whistleblowers may receive up to 10% of the fine imposed in cases where the fraud exceeds 100 UTA.
Appraisal and Business Reorganization The appraisal criteria for assets is redefined, aligning it with market values. New guidelines are also established for the reorganization of companies at the international level, with the requirement to justify the transaction under a "legitimate business reason" that is not merely of a tax nature.
Delivery of Information by Financial Entities An obligation is introduced for financial entities to report semi-annually on the credits received by taxpayers in their accounts when certain transaction thresholds are exceeded, in order to improve transparency and tax control.
Changes in Tax Offenses and Penalties Penalties for issuing false documents and for tax evasion are stiffened, with significant fines for those who commit fraud. Stiffer penalties are also established for those who omit relevant information during SII audits.
Implementation of the New Measures The amendments contained in the Tax Compliance Project will enter into force gradually, as from the month following its publication in the Official Gazette, with specific deadlines for each provision.
This project represents a significant advance in the modernization and strengthening of the Chilean tax system, with measures that promote transparency, combat tax evasion and optimize the management of public resources.
If your company needs advice on how to adapt to these new regulations, our tax consulting experts are available to offer customized solutions.
Write to us at contacto@taxaccount.cl to request your advice.
