On December 19, 2024, the Chilean Internal Revenue Service (“SII”), as part of its strategy to combat tax evasion, issued Resolution No. 121 (“Resolution”), the purpose of which is to reinforce the correct issuance of invoices by supermarkets and restaurants. It is noteworthy in this Resolution that it seems to delegate to the employees of these establishments certain powers of control in the issuance of invoices and, thus, to avoid improperly requesting the issuance of invoices for the sole purpose of increasing the tax credit of the taxpayer.
One of the substantive requirements to qualify for this tax credit, as stated in Article 23 of the Sales and Services Tax Law (“”), is that these expenses or disbursements must be directly related to the activity or line of business of the taxpayer. For practical purposes, the regulation of the LIVS, in its article 41, expressly states that the disbursements are not directly related to the taxpayer’s activity when these “are destined to purposes different from those that constitute its usual line of business or activity, as would occur, for example, with the imports, acquisitions or use of services that the taxpayer makes for its own use, or that when destined to its company or business, such destination is for purposes other than those of its industry or activity, in such a way that it cannot be considered that it is directly related to its line of business”.
In line with the above, the Resolution seems to delegate to the workers the responsibility to determine whether a consumption is related to the taxpayer’s line of business and, if so, to proceed with the issuance of the corresponding invoice. This is evident from paragraph 5 of the operative part, which requires supermarkets and restaurants to implement internal control procedures to ensure that invoices are only issued in cases where the requirements established in the Resolution are met. Among these requirements, paragraph 2 establishes that invoices may only be issued for transactions that are “directly related to the business” of the taxpayer. Likewise, paragraph 6 of the operative part provides for penalties for restaurants and supermarkets in case the“corresponding tax document” is not issued.
The true scope of the Resolution is still uncertain and will be known as of March 1, 2025, the date of its entry into force. However, if this kind of delegation of auditing powers is confirmed, we consider that it constitutes a negative precedent and a practice that the tax authorities do not seem to have taken into account its full impact. In a context where the SII seeks to combat tax evasion through a more rigorous control, transferring an exclusive function of the tax authority to third parties outside the administration without adequate tax training, generating at least three adverse consequences:
We consider the above to be impractical and, in many cases, impossible to comply with. Since the rules should be designed to achieve their legitimate objective, we believe that the SII should review the Resolution and adjust it so that the responsibilities and penalties correspond and are applied in a fair manner.
For any question related to this topic, please contact Vicente Sepúlveda and Javier Edwards.
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