Much progress has been made in the field of tax prevention, detection and control. Proof of this is the US$120 million that the SII has recovered since 2015. However, there is still a way to go in the face of these crimes.
Since its entry into force in 2015, the General Anti-Circumvention Rule (NGA) has allowed the Internal Revenue Service (SII) to recover more than US$ 120 million in its audit. But, in addition to that, there are experts who believe that this regulation has had a deterrent effect on taxpayers.
“One of the most relevant complexities of tax avoidance is that it is not always easy to distinguish it from evasion and legitimate planning on how to organize a business activity considering, among other aspects, its tax effects,” says Alberto Cuevas, KPMG Tax & Legal partner in Chile, recalling that the NGA allowed to define tax avoidance and set powers for the SII and procedural rules on how to apply them.
After these changes, which, among other things, promoted a preventive function in the SII of the application of the anti-avoidance rules, the partner of Tax Controversy of Deloitte, Pablo Quezada, explains that large national and multinational companies have adopted as a good practice the verification of the economic or legal reasons that justify a reorganization or complex operation, and request reports or legal opinions or, rightfully, make a prior consultation to the SII on whether the operation could be qualified as elusive.
“By applying good sustainability practices, more and more companies are developing and implementing tax policies at the corporate level that include compliance with the tax law both in letter and in spirit as a principle, without prejudice to the legitimate differences in interpretation of the law that may arise with the SII,” Quezada points out.
For Víctor Fenner, deputy Tax partner at EY, the figures shown in the NGA’s balance sheet are proof that taxation has worked, but he believes that the focus should be on prevention. The good news, he says, is that the SII’s strategic plan for 2024 includes ‘cooperative compliance’, which can generate incentives for companies to develop effective tax risk management protocols that provide certainty to both parties.
Fenner explains that, many times, “What is behind a discussion about circumvention is a lack of information about the nature of the taxpayer’s business or operations (on the treasury side); or, the absence of a uniform and consistent policy that is aware of and internalizes the criteria of the authority and the courts (on the company side)”.
Dynamic scenario
According to David Ancelovici, director of the Tax Group of Albagli Zaliasnik, there are many challenges in this area, starting with defining the main focus of taxation in the different areas in which the IBS has shown interest (informality, high net worth, foreign operations, among others).
“Important advances in other jurisdictions consider technological control initiatives, adoption of measures related to BEPS 2.0, and greater exchange of information with tax authorities from different countries, issues that our government should also work on and prioritize,” concludes Ancelovici.
