Fiscal Control in External Accounts, raises Tax Compliance

April 25, 2024

Introduction: Challenges of the SII in the Fiscal Control of Foreign Accounts 

The Chilean Internal Revenue Service (SII) has started a preventive campaign, identifying 676 taxpayers with a high volume of assets abroad, totaling more than 23 billion dollars. This action seeks to ensure an adequate declaration of income, both domestic and foreign, to improve tax compliance. 

Legal Framework and Tax Tools: Implementation of the Common Reporting Standard (CRS) 

Chile, through the CRS and other international agreements, has strengthened its capacity to exchange financial information with close to 125 jurisdictions. This system allows the SII to obtain and share taxpayer account data, which is crucial to detect and manage possible tax irregularities. In addition to this tool, the SII has the Country by Country Report (through DJ 1937), to exchange information with other jurisdictions on Transfer Pricing between related parties. 

Implications for Taxpayers: Obligations and Risks for High Net Worth Individuals. 

Among those identified, high net worth individuals and companies predominate, representing the highest percentage of the total investigated. This underscores the importance of correct reporting to avoid penalties and stresses the need for specialized advice on Transfer Pricing and international tax compliance. 

Conclusions and Recommendations: Towards More Efficient Tax Compliance. 

This proactive approach by the SII not only helps prevent tax evasion, but also serves as a reminder of the importance of compliance with current transfer pricing and international taxation regulations. Companies should be especially attentive to these regulations to ensure proper tax reporting and optimization.