On September 25 of this year, the Chamber of Deputies ratified the amendments made by the Senate to the bill that establishes rules to guarantee compliance with tax obligations (hereinafter referred to as the “Bill”), which only needs to be enacted and published in the Official Gazette for it to become law.
The main focus of the Project is to combat tax evasion and avoidance through the modernization of the tax administration. By this means, the Ministry of Finance expects to collect 1.5% of the Gross Domestic Product (“GDP”), which would be equivalent to approximately US$ 4.5 billion.
The following is a brief analysis of the main approved amendments:
1.- Bank secrecy
The lifting of bank secrecy will maintain its judicial nature, i.e., it must be declared by a Customs Tax Court (hereinafter, “TTA“), upon request of the Internal Revenue Service (hereinafter, “SII“). Likewise, it is emphasized in the Bill that the SII may request -in specific cases- the lifting of the bank secrecy without prior notification or opposition of the taxpayer.
Anonymous whistleblower
The anonymouswhistleblower, also known as “whistleblower” in other parts of the world, is a mechanism that aims to dissuade, detect and dismantle unlawful conduct by means of information provided by whistleblowers, who, by means of incentives, deliver it to the tax authorities. In the Senate, the reward equivalent to 10% of the fine applied to the reported taxpayer was maintained; however, a lower limit was set for its application when the defrauded tax is higher than 100 Annual Tax Units (“UTA”).
3.- Value Added Tax
Changes were approved that regulate the refund of Value Added Tax (hereinafter “VAT”) in the case of exports. Also, to refresh our memory, the Bill repeals the VAT exemption for imports whose amount is less than 41dollars. Now, regardless of the amount of the import, a rate of 19% must be applied.
4.- Relationship rules
The relationship hypotheses are expanded to include second-degree blood relatives (siblings, grandparents and grandchildren).
5.- General Anti-elusive Standard (GAS)
The external council in charge of giving an opinion on the cases of application of the rule was eliminated. Likewise, the application of the rule in court was maintained, and it must be applied by a TTA upon request of the Director of the SII who, in turn, must exercise the request after a prior recommendation of the Executive Committee (internal body of the SII created by the Project). On the other hand, the statute of limitations is increased to 6 years.
6.- Cash transactions
It is established that purchases of goods in cash in excess of 135 Unidades de Fomento must be made by means of payment that ensure traceability or that have documentation that allows the identification of the payer.
7.- Tax Council
A Tax Council was created, composed of four external advisors to the SII and the Director of the SII, which will be responsible for pronouncing on the legality of certain circulars issued by the SII. The interpretation of the Tax Law will continue to be the responsibility of the Director of the SII.
For any question related to this topic, please contact Vicente Sepúlveda and Javier Edwards.
