News No. 002-2023-CL | The Chamber of Deputies rejects the transfer pricing changes of the Tax Reform Bill in Chile

The Chamber of Deputies rejects the transfer pricing changes of the Tax Reform Bill in Chile

Santiago de Chile, 30 de Marzo del 2023

The Tax Reform Bill published on July 7, 2022 by the Executive Power of the Government of Chile was rejected by the Chamber of Deputies on March 8, 2023. Said reform proposed special anti-avoidance measures with respect to the regulations on Tax Prices. Transfer, in order to be incorporated into the Income Tax Law. Among them we have:

1. The concept of full competition was incorporated, although in practice the Tax Administration followed this principle.
2. It was proposed that the Taxpayer have the documentation that validates the methods applied, whether they are their own or with respect to the foreign parties involved in the operation.
3. It was established that, if the price or margin of the transaction with its related parties is outside the interquartile range, it was considered that the agreed price or margin is not at arm’s length. Likewise, in the event that the SII issues a tax assessment, it was established that the Transfer Pricing adjustment will be made to the median of the interquartile range.
4. Greater guidelines were established so that taxpayers submit a request for an Advance Price Agreement before the SII.

Although this reform project has been rejected, it is observed that the Transfer Pricing regulations are aligned with international standards, since Chile is a member country of the OECD.

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