Chile’s Internal Revenue Service (SII) has announced that the Law on Compliance with Tax Obligations (Law No. 21.713) has been published in the Official Gazette on 24 October 2024.
General and Special Anti-Avoidance Rules changes
The General Anti-Avoidance Rules (GAAR) have been changed to include a broader definition of avoidance and to amend conditions for their application. The rules can apply if transactions reduce the taxable base by 1,000 UTM or more, result in a tax benefit, or involve a special tax regime. A new executive committee will review cases meeting these criteria and recommend the application of GAAR or Special Anti-Avoidance Rules (SAARs) as needed. These changes will be effective from 1 November 2024.
Transfer pricing changes
Transfer pricing changes include aligning existing TP rules with OECD guidelines by introducing the arm’s length principle and emphasising functions, assets, and risks of involved parties. Requirements for maintaining supporting information when the analysed party is abroad are clarified.
In addition, self-adjustments that increase taxable income are permitted, and international best practices for advance pricing agreements (APAs) are adopted, including pre filing meetings, extending APA validity to 5 years, and introducing an APA roll-back provision for up to 3 prior years before its signing.
These changes will go into effect from 1 November 2024.
Amendments to Controlled Foreign Companies (CFC) rules
Effective 1 January 2025, amendments are made to controlled foreign companies (CFCs) rules, including considering related parties’ income for the 2,400 UF passive income threshold. This threshold won’t apply if the CFC is in a preferential tax regime.
Other tax changes
- Starting 1 January 2025, new preferential tax regimes will replace regulations regarding low or no-tax jurisdictions. A jurisdiction will be considered a preferential tax regime if it lacks an effective information exchange agreement with Chile or if the Global Forum on Transparency and Exchange of Information does not consider the jurisdiction compliant regarding information exchange;
- The late tax payment interest penalty has been changed from 1.5% per month to a market interest rate plus 3.5%, calculated daily, effective 1 January 2025;
- A tax regularisation regime has been introduced, allowing taxpayers to declare undeclared foreign assets or income by paying a 12% tax for assets acquired before 1 January 2023 and revenue generated by them until 31 December 2023. This regime will be valid until 30 November 2024;
- Taxpayers with pending legal proceedings before 1 January 2024 can apply for an interest and penalty relief scheme by accepting the adjusted tax debt until 30 November 2024;
- New measures require digital platform operators to be VAT taxpayers for transactions conducted through the platform unless the goods or services involve VAT-registered taxpayers.
