On June 21, 2026, the Chilean Internal Revenue Service (SII) did something unusual for a tax administration: through Director Jorge Trujillo, it publicly announced what it is looking for before conducting an audit. The occasion was the publication of a new set of industry-specific benchmark indicators for distribution companies, as part of its 2026 Tax Compliance Management Plan (PGCT). But the information of greatest interest to a multinational group is not the benchmark itself, but the philosophy behind it: the SII is explicitly building a preventive compliance model in which Advance Pricing Agreements (APAs) play a central role.
The Numbers Behind the Announcement
According to the PGCT 2026 itself, distributors of finished goods account for 86% of reported transactions related to Transfer Pricing in Chile, equivalent to more than USD 18,000 million. The SII’s first sectoral analysis already covers six industries—vehicles and parts, technology, pharmaceuticals, food and non-alcoholic beverages, personal care, and alcoholic beverages—which account for 57% of that total, representing approximately USD 10,000 million in transactions. Out of a sample of 281 taxpayers analyzed, the SII identified 84 companies with risk levels warranting enhanced monitoring, primarily those with recurring financial and tax losses.
The SII director himself was explicit about the objective: to provide taxpayers with early warning signs so they can review their policies and take preventive measures before a finding turns into a contingency or results in an audit.
Where do APAs fit into this equation?
The PGCT 2026 itself reports that, since 2019, the SII has entered into 23 Transfer Pricing Agreements, including unilateral (APA) and bilateral (BAPA) agreements. This is no small number for a mechanism that, in most jurisdictions in the region, remains underutilized due to a lack of awareness of its true scope or the perception that the negotiation process with the tax authority is more costly than the risk of a potential audit. The message that emerges from the Chilean plan is the opposite: the tax administration is actively encouraging this preventive approach because it finds it more efficient than litigating on a case-by-case basis.
An APA, in simple terms, is a prior agreement between the taxpayer and the tax authority (or between two tax authorities, in the case of a BAPA) that establishes in advance the methodology—and in many cases the range of results—that will be considered in accordance with the arm’s-length principle for a set of intercompany transactions during a specified period.
What does this mean for a multinational group with distribution operations in Chile?
The combination of these two factors—publicly available industry benchmarks plus an expanding APA program—changes the risk assessment for any distributor. If a subsidiary’s margins consistently fall below the industry range that the SII itself has already made public, the likelihood of an audit no longer depends on the tax authority “discovering” the anomaly: the starting point for the risk analysis is now publicly available information. In this context, negotiating an APA is no longer an option reserved for the group’s largest or most complex operations; it becomes a reasonable risk management tool even for mid-sized distributors with consistently tight margins or recurring losses.
Checklist of Recommendations
- Compare the operating margins reported by the distribution subsidiary against the industry benchmarks already published by the SII, before the authority does so during an audit.
- If the subsidiary operates in one of the six covered sectors and reports results below the benchmark range, document with particular rigor the economic reasons (functions, assets, risks) that explain the deviation.
- Formally evaluate the advisability of negotiating a unilateral or bilateral APA when the transaction has sufficient volume, recurrence, and time horizon to justify the negotiation process with the SII.
- Review the consistency between financial results and Transfer Pricing documentation (Local File, Master File) on an annual basis, not just during tax filing season.
- Monitor whether the SII expands the sectoral coverage of its indicators beyond the initial six industries, given that the plan already covers 57% of the distributor universe and is expected to continue growing.
At TPC Group, we assist multinational groups with distribution operations in Chile and the rest of Latin America in assessing whether an Advance Pricing Agreement is the appropriate approach for their structure, and in preparing the technical documentation necessary to negotiate it with the relevant tax authority.
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