Chile's tax authority announces regulations for corporate groups and unified audit procedure

On January 22, 2025, the Chilean tax authority (SII) published Circular Letter No. 6 (Circular Letter) in the government’s Official Gazette. The Circular Letter addresses corporate groups and the unified audit procedure, providing instructions related to the new second paragraph of Article 8, No. 14, and Article 59 of the Chilean Tax Code, which were introduced by Law No. 21.713, published in the Official Gazette on October 24, 2024.

Law No. 21.713 is a tax reform that establishes rules to ensure compliance with tax obligations within the fiscal pact for economic growth, social progress, and fiscal responsibility. Below is a summary of the modifications and instructions contained in the Circular Letter.

Corporate group representatives

• Appointment of a group representative: Corporate groups must appoint a group representative under Article 8, No. 14 of the Tax Code, regardless of whether the group is undergoing an audit process.


• Definition of corporate group: A corporate group is defined as a set of entities with ownership, management, or credit responsibility links that suggest their actions are guided by, or subordinate to, the group’s common interests, or that they share financial risks related to credit or securities issuance (Article 96 of Law No. 18.045 on the Securities Market).


• Powers of the representative:


1. The representative is responsible for coordinating and managing communications and activities between the SII and the corporate group to facilitate collaboration measures under Article 33 of the Tax Code. This includes enabling the exchange of information with the SII and cooperation on matters such as tax transparency and evasion prevention.


2. The representative is different from the legal representative of each entity. They are a special agent designated by the group to act as the SII's point of contact. They are not authorized to receive notifications for information requests from group entities or to amend declarations or take actions on behalf of group members.


• Penalty for failure to designate a representative: Failure to appoint a representative hinders preventive and collaborative actions between the SII and the group. The Circular Letter indicates that this may lead to audit procedures and other enforcement actions.


• Formalities for designation: Designation, modification, or revocation of the representative must be reported to the SII electronically, along with supporting documentation.
  
  An administrative regulation outlining this specific procedure has yet to be published. However, since the designation is electronic, it is assumed the representative must be appointed by an entity with a Chilean tax identification number (RUT) and SII web credentials. The representative should also have a domicile in Chile.

Unified audit procedure for corporate groups

• Description of the procedure: Article 59 of the Tax Code allows the SII to conduct a unified audit procedure involving all taxpayers within a corporate group that participated in specific operations or transactions. This unified approach aims to enhance administrative efficiency, avoid related jurisdictional processes across different tax and customs courts, and reduce the risk of contradictory outcomes.


• Audited activities: Audits will focus on operations or transactions between group members that occur and have effects in Chile.


• Competent SII unit: The Regional Directorate corresponding to the domicile of the taxpayers will oversee the audit. If domiciles span different jurisdictions, the unit for the controller’s domicile in Chile will take responsibility.


• Judicial jurisdiction: The Tax and Customs Court corresponding to the jurisdiction of the SII unit conducting the audit will have jurisdiction.


• Resolution initiating unified audits: The unified audit procedure begins with a resolution individually notified to each corporate group entity involved. This resolution is not a request for information, cannot be appealed, and does not affect statute of limitations deadlines.


• Deadlines: The deadlines in Article 59 for issuing citations, adjustments, or assessments will begin when the auditing official certifies, in a single act notified to all parties, that all requested documentation has been provided.


• Expansion to other group members: The unified audit may extend to additional group members if subsequent information confirms their involvement in the audited operations or transactions.

For more information, please contact the authors.

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