EUROsociAL supports Chile in the detection and control of tax avoidance

Chile’s tax reform, ratified in Law No. 20,780 of September 2014, incorporated for the first time into Chilean tax law the description of anti-tax avoidance provisions to address abuse of legal forms and simulation. The law empowers the Internal Revenue Service (SII) to determine tax settlements without first obtaining judicial authorisation.

The amendments introduced by Law No. 20,780 into the Chilean Tax Code attempt to apply experience with anti-avoidance regulations, such as Spain’s, and therefore Chile’s SII expressed interest in learning about the Spanish experience in terms of interpretation of the anti-avoidance regulations, as well as with respect to inspection procedures developed to detect it, best practices for inspection in this area, management results, and jurisprudence on the subject from the courts.

To address the request from the Chilean Internal Revenue Service, two experts from Spain’s Tax Agency (AEAT) travelled to Chile to support the agency in the preparation of programmes and plans for verification of compliance with the regulation on voluntary declaration of foreign assets.

The three-day work programme was carried out at the SII’s training school and included an analysis of Spanish and Chilean regulations, mechanisms for notifying the taxpayer, the selection and verification processes defined in relation to taxpayers who submitted declarations under Spanish regulations and, lastly, a workshop on analysis and definition of avenues for inspection.

Twenty civil servants participated in the activity from different departments of the Internal Revenue Service. The participants highlighted the level of the advising, and explored similarities and differences between the model applied in Spain and the Chilean Tax Reform Law.