Each business group must appoint a proxy to coordinate measures with the Internal Revenue Service.
On January 16, the Internal Revenue Service (SII) published Circular No. 6, which provides instructions on the amendments introduced to the Tax Code by Law No. 21,713 on Tax Compliance, published on October 24, 2024.
The initiative focuses on the following aspects:
- Definition of Business Group and Proxy:
The definition of business group based on the Securities Market Law is reinforced, detailing obligations such as the designation of a proxy in charge of maintaining communications and coordinating with the SII.
“Corporate group is the group of entities that present links of such nature in their ownership, administration or credit responsibility, that make it be presumed that the economic and financial performance of its members is guided by the common interests of the group or subordinated to them, or that there are common financial risks in the credits granted to them or in the acquisition of securities issued by them”.
Although the legal representative of each of the taxpayers that are part of the business group and the attorney-in-fact, fulfill different roles, both may act before the SII within the scope of their attributions.
- Tax Sustainability:
It is defined as a set of measures to promote tax cooperation and transparency. Taxpayers may opt for an annual certification granted by independent certifying companies.
- Unified Auditing:
Introduction of the procedure that allows reviewing operations of business groups in a comprehensive manner, reducing duplicities and ensuring consistency in the results.
Likewise, the circular clarifies the operation of a series of figures incorporated by Law No. 21,713 on Tax Compliance, among them:
- Appointment of Proxy.
a) Each business group must appoint a proxy to coordinate actions with the SII.
b) It is not responsible for legal notifications, except in the procedures of Article 33 of the Tax Code.
c) Failure to appoint a proxy may result in stricter audits.
2. Tax Sustainability Certification
a) Its objective is to seek transparency and cooperation in tax compliance.
b) Process for compliance:
- Certifying companies must be registered and comply with requirements established by the SII.
- The annual certification verifies that the tax strategies comply with sustainability standards.
c) Publication: Registers will be accessible on the SII website.
3. Unified Auditing
a) Seeks to reduce administrative costs and avoid contradictory decisions in tax courts.
b) The most important points of this process:
- Involve operations of business groups in Chile.
- The review will be carried out by a single competent unit of the SII, facilitating joint audits.
- The resolutions will be notified individually to the audited entities.
In this way, the collaboration with business groups seeks to enable the service to supervise transparency practices and compliance with tax obligations, fostering a deeper understanding of the taxpayers’ business, as well as of the industry, the sector and its operational specificities.
This strategy optimizes the auditing processes, making them more comprehensive and effective, contributing to prevent the decrease of the tax base within the group.
It is important to point out that these modifications already came into effect as of November 1, 2024, immediately impacting business groups in Chile.
For more information please contact our Tax team:
Rodrigo Albagli | Partner | ralbagli@az.cl
Álvaro Rosenblut | Partner | arosenblut@az.cl
Andrea Bobadilla | Director Tax Group | abobadilla@az.cl
Valentina Herrera | Associate | vherrera@az.cl
Javiera Melo | Associate | jmelo@az.cl
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