Chile´s Government Proposes New Amendments to the Tax Compliance Bill

On August 12, the Chilean government introduced new amendments to the Tax Compliance Bill, which is part of the larger initiative known as the Pact for Economic Growth, Social Progress, and Fiscal Responsibility.

This legislation, designated as Bulletin 16621-05, had already received preliminary approval from the Senate and was sent back to the Finance Committee for further evaluation. The latest amendments from the executive branch are designed to fine-tune the bill, and further amendments are expected, particularly regarding the oversight of the Internal Revenue Service (SII) and the administrative enforcement of the General Anti-Avoidance Rule (GAAR). The executive branch has indicated that the proposed changes will be implemented without exceeding the current budget. The government aims to secure Senate approval for these amendments to expedite the final passage of the bill.

KEY FEATURES OF THE NEW AMENDMENTS

1. BANKING INFORMATION AND CONFIDENTIALITY

The amendments introduce two distinct procedures for requesting banking information:

• General Procedure: This process, which requires court supervision, is similar to the current system but includes shorter timeframes and increased protections for taxpayers. Under this procedure, the SII can request specific banking information during audits. Taxpayers have ten days to respond, and if they refuse access, the SII must seek authorization from a court to obtain the information.

• Exceptional Procedure: In cases involving tax crimes or significant discrepancies between declared and actual amounts, the SII can request banking information without prior notification to the taxpayer. These requests must be approved by a Tax and Customs Court, which will issue a decision within five days.

2. INFORMATION DISCLOSURE AND BUSINESS START-UP REQUIREMENTS

The amendments make several adjustments to the bill's provisions on information disclosure:

• Eliminating the requirement to report changes in legal representatives or partners that occur abroad but impact Chilean taxpayers.

• Extending the statute of limitations for cases where required information has not been disclosed.

• Requiring operators of digital platforms to verify that their users comply with tax obligations and report transaction details to the SII.

3. REPORTING OF FREQUENT BANK TRANSFERS

Banks and financial institutions will be required to report to the SII when an account receives more than 50 deposits from different individuals, or 100 deposits within six months. The amendments clarify that this count should include all of an account holder’s accounts.

4. AUDIT AND COMPLIANCE MEASURES FOR FINANCIAL INSTITUTIONS

The SII will implement systems to facilitate data sharing between public services and financial institutions for tax audits. Banks will also need to verify the business registration and tax compliance of clients engaging in financial transactions.

5. REGULAR SELLERS OF USED GOODS

Frequent sellers of used goods must issue tax documents that detail the supplier, the goods, and quantities purchased unless an invoice from the supplier is provided.

6. MANDATORY ELECTRONIC PAYMENTS

Transactions over 50 UF must be conducted using electronic payment methods that identify the payer. Violating this rule could result in heavy fines and imprisonment for repeat offenses.

7. SELF-REPORTING OF TAX DISCREPANCIES

Taxpayers can voluntarily disclose discrepancies that might be considered tax crimes under certain conditions, such as not being under audit for the same taxes and having no prior tax crime convictions. This option allows them to avoid criminal charges, though they will still be responsible for the owed taxes and penalties.

8. RULES FOR ANONYMOUS TAX INFORMANTS

The amendments increase the requirements for individuals to qualify as anonymous tax informants eligible for financial rewards. The offense must involve more than 100 UTA, and informants who lose their anonymity will not receive compensation.

9. BUSINESS CLOSURE PROCEDURES

A "positive silence" rule has been introduced for closing a business. If the SII does not issue a tax assessment within six months of a closure request, the business closure is automatically accepted.

CHANGES TO VAT LAW AND CUSTOMS REGULATIONS

VAT Law 

The amendments limit how the taxable base is determined for sales under 2,400 UF and remove customs duties for goods purchased through online platforms, provided the appropriate VAT has been paid.

Customs Regulations 

The changes ensure that taxpayers have an opportunity to present their case during administrative appeals. Electronic records maintained by the Customs Administration cannot be deleted without a court order.

Changes to the Luxury Tax

The amendments expand the exemption for yachts used by high-performance athletes to include lighter vessels, applying specific weight limits.

Modifications to the Taxpayer Ombudsman’s Office (DEDECON)

The amendments require DEDECON to present an annual activity report to the Senate Finance Committee, increase its authority to represent taxpayers in customs matters, and enhance coordination with the SII and other tax authorities.

These proposed changes aim to improve tax compliance, enhance transparency, and streamline administrative processes while protecting taxpayers’ rights.

SUMMARY 

This table summarizes the main changes introduced in the recent amendments to the Tax Compliance Bill, highlighting the new procedures, reporting requirements, compliance measures, and regulatory adjustments.

SOURCES/RECOMMENDED READ: 

• Senate - Processing of projects (senado.cl)

• PwC-Newsletter-Amendments-to-the-Tax-Compliance-Obligation-Bill.pdf