We invite you to read the publication of Diario Financiero in which our director of the Tax Group, Andrea Bobadilla, commented on how companies should prepare for audits under the new Tax Compliance Law.
The law, enacted yesterday, seeks to reduce the percentage of tax non-compliance and to strengthen the auditing agencies. The new strategy includes proactive controls in the field.
One of the main objectives of the tax compliance law, approved in September and enacted yesterday, is to reduce the percentage of tax non-compliance and thus increase tax collection, in order to open the possibility of financing the pension reform under discussion in Congress.
This law includes measures such as strengthening the auditing function to combat tax evasion and avoidance and modernizing the tax administration. In that sense, the regulation comes with changes for audits, says EY’s senior manager of tax controversies, Andrés Vio.
In relation to the unified audit of business groups, it will allow a comprehensive and consistent review of operations or transactions carried out by different taxpayers that make up the same business group. “For these purposes, the SII may provide that the audit is based in the office that has jurisdiction over the domicile of the controlling entity or in the Directorate of Large Taxpayers,” he explains.
Among other modifications, the regulation considers updates to the appraisal rules contained in the Tax Code, says Vio. This will make it possible to review operations when they are not carried out at normal market values, together with modernizing the rules on corporate reorganizations.
The new power to audit business groups will be a powerful tool for the SII to verify whether or not taxpayers have maintained tax neutrality in these reorganization processes,” says Vio.
reorganization processes”, says the executive.
In addition, the new strategy includes proactive controls in the field, where the SII will also have advanced technology for risk analysis, which will allow more specific and effective processes.
In this way, tax audits will reach business groups “regardless of the form they adopt and the place where they are located”, says BBSC’s general manager, Claudia Valdés.
Greater transparency
Firms have a big challenge for a correct and collaborative implementation with the different institutions involved in the process, says the head of Albagli Zaliasnik tax group, Andrea Bobadilla, as they will have to adapt their internal controls to ensure proper traceability of their operations and transactions.
“The adoption of tax management tools, along with continuous training of employees, will be a cornerstone within companies to minimize risks and integrate tax sustainability policies in order to facilitate compliance and achieve greater transparency in the processes,” explains Bobadilla.
To this end, companies that do not have a tax area specialized in internal tax compliance should consider creating one or seek the support of specialized external tax advisors, says BDO tax & legal partner Andrea Filipini. “A prior analysis of the implications of the new rule on each company is essential, indicating specifically what the effects will be and how much it will impact on the company’s resources,” she emphasizes.
