LAW Nº 21.047 - New tax provisions to strengthen mechanisms against tax evasion and tax avoidance
Last November 23, Law No. 21.047 was enacted that modifies, among others, the Decree Law 82 Income Law, Law No. 20.780 that implements the tax reform and the Tax Code. The most relevant changes it contains refer to:
- Repeal the investment platform companies regime contained in Article 41 D of the Income Tax Law, which allowed them to pay taxes only on income obtained from a Chilean source. As of the date of the law, the entry of new companies into this regime is prohibited.
- Improve the mechanisms that fight tax evasion and avoidance.
- Modify provisions on the tax treatment of donations, highlighting the creation of a special franchise for donations for the possible visit of Pope Francis to Chile
- Replace the list of tax havens prepared and updated by the Ministry of Economy with a determination based on the general criteria established in Article 41 H of the Income Law.
- To extend the term for the subscription and ratification of agreements to avoid double international taxation.
- Add the 62 ter article that modifies the rules on the reservation of banking information to the Tax Code. This new article grants powers to the SII to request from national financial institutions certain information on persons and entities without domicile or residence in the country, allowing Chile to comply with the obligations contracted and international agreements dealing with the exchange of information from financial institutions.
In parallel to the enactment of Law No. 21.047, the SII published its latest version of the Catalog of Tax Schemes, thus adding 15 new situations, for a total of 28, that could be constitutive of simulation or abuse by the taxpayer. A determination that one of these schemes was used for the purpose of reducing the tax burden, leads to significant penalties for both the taxpayer and its directors, legal representatives and advisors, in the case of a company and that determine that they violated their duty to supervise. You can consult the full text of the catalog in this link: http://www.sii.cl/destacados/catalogo_esquemas/catalogo_esquemas_2017.pdf
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