Within the framework of the Public Finance area of the EUROsociAL Programme, financed by the European Union, support was provided to Chile's Internal Revenue Service (SII) in the form of an expert advisory mission to prepare programmes and plans for verifying compliance with the requirements of the regulation on voluntary declaration of foreign assets.

Chile's tax reform, ratified in Law No. 20,780 of September 2014, incorporated for the first time into Chilean tax law the description of anti-tax avoidance provisions to address abuse of legal forms and simulation. The law empowers the Internal Revenue Service (SII) to determine tax settlements without first obtaining judicial authorisation.  The amendments introduced by Law No. 20,780 into the Chilean Tax Code attempt to apply experience with anti-avoidance regulations, such as that of Spain, and therefore Chile's SII expressed interest in learning about the Spanish experience in terms of interpretation of the anti-avoidance regulation, as well as with respect to inspection procedures developed to detect it, good practices for inspection in this area, management results, and jurisprudence on the subject from the courts. 

To address the request from the Chilean Internal Revenue Service, two experts from Spain's Tax Agency (AEAT) travelled to Chile in May 2015 to support the SII in the preparation of programmes and plans for verification of compliance with the regulation on voluntary declaration of foreign assets. The objective of the activity was based on an analysis of the Spanish experience with similar measures, which would allow Chile to implement adequate mechanisms that, on the one hand, would incentivise submission by taxpayers of these declarations, and, on the other, allow proper inspection of same.

Some 20 civil servants participated in the activity from different departments of the SII: Office of the Director; Inspection and Legal Sub-Directorates; Directorate of Large Taxpayers; and the Central, Western, Southern and Northern Metropolitan Regional Directorates.

The regulation included in the Tax Reform is aimed at taxpayers domiciled, resident, established, or incorporated in Chile prior to 1st January 2014, who can voluntarily opt to declare to the Internal Revenue Service certain overseas or domestic assets or income which, while taxable, have not been declared on a timely basis. The deadline set was 31st December 2015 for voluntarily declaring overseas assets and income, with payment of a special tax of 8% in lieu of other taxes that might have been levied on the declared assets or income. This exceptional mechanism has been in force since 31st December 2105. After this date, the mandatory regime of declaration of unearned foreign income established by law will be applied.

In this context, a total of 7.832 declarations had been received until 31st December 2105 by the SII from taxpayers under the voluntary and extraordinary system of declaring foreign assets or income established in transitory article 24 of the Tax Reform. The revenue collected for this item exceeds US$1.502 million.

This activity is part of the "Voluntary Compliance with Tax Obligations" action of the EUROsociAL Programme, financed by the European Union and coordinated by the FIIAPP, in which the AEAT and the Inter-American Centre for Tax Administrations (CIAT) are acting as operational partners.

You can see more information on this topic on the website of Chile's SII.