Chile's Internal Revenue Service publishes its 2025 Tax Schemes Catalog
Each year, the Internal Revenue Service of Chile (SII) updates its Tax Schemes Catalog. This guide contains a list of operations that may be declared elusive by applying the General Anti-Elusiveness Rule. The catalog's objective is to strengthen the fight against tax avoidance by indicating potentially elusive tax behaviors that will be specially analyzed by the authority.
In January 2025, the SII updated the catalog, which includes seven new cases, totaling 92 overall. Below, we take a closer look at the updates and their potential scenarios.
Case 86: All the partners in a professional corporation withdraw profits, but only one partner carries out activities and has a strategic role. These corporations are exclusively dedicated to providing professional services and are exempt from value-added tax. In this scheme, the working partner receives a smaller share of the profits, reducing the tax base for the Global Complementary Tax, which is progressive according to income level.
Case 87: A family sets up a company in which the parents hold preferred shares, entitling them to a larger share of the profits, and the children hold ordinary shares. Subsequently, the economic preference of the parents' shares is eliminated, transferring that right to the children's shares without receiving any consideration. This allows the parents to transfer present and future profits to their children, avoiding the gift tax.
Case 88: Parents and children are partners in a company, with the parents as the primary owners. They sell the bare ownership of their social rights to their children, but retain the usufruct. However, the children withdraw profits as if they entirely owned these rights. This enables the parents to transfer full ownership to their children free of charge, thus avoiding the gift tax.
Case 89: A company that owns real estate is divided, with the continuing company becoming the usufructuary, and the new company becoming the bare owner. Subsequently, the new company is dissolved, awarding the bare ownership to its partners. Then, the continuing company sells its right of usufruct, and the individual partners sell the bare ownership of the real estate to a third party. The sale of the natural persons' bare ownership of the properties is taxed with a single and preferential substitute tax of 10 percent. The continuing company would only pay first category tax on the profit from the sale of the bare ownership of the properties, reducing the tax burden to the profit corresponding to the usufruct.
Case 90: A company owned by parents and children is transformed from a “limited” company to a “joint-stock” company, which would issue ordinary shares to the children, and would contain an economic preference for the parents. This preference is never exercised. Subsequently, it is transformed back into a limited liability company, increasing the initial shareholding of the children without consideration. As a result, the company's ownership would be transferred free of charge, thus avoiding gift tax.
Case 91: A Chilean business group operates abroad through an entity controlled by a Chilean company. Its owners create a new company in the same jurisdiction and increase the capital of the original entity, incorporating the new company as a shareholder. With this restructuring, they would seek to avoid the entity being controlled under controlled foreign corporation (CFC) regulations, thus, not recognizing passive income from abroad on an accrual basis in Chile.
Case 92: The partners of a company agree to divide it and assign property to the new company created as a result of this division. Then, this new company is dissolved, and its partners are awarded the property. As a result, the partners pay the tax for terminating the business, which is less than the Global Complementary Tax they would have faced if they had received the property through a withdrawal of profits prior to the division.
Three of these seven cases are related to asset dilution. The SII has reported that since 2021, audit processes associated with this risk have generated tax rectifications of CLP 13,500,000,000 (approximately USD 14,135,000), and 30 court orders with a tax loss of CLP 42,000,000 (approximately USD 44,000,000). Another three cases relate to corporate reorganizations, the auditing of which since 2021 has generated a collection of CLP 1,400,000,000 (approximately USD 1,470,000) and six court orders for tax damage exceeding CLP 8,700,000,000 (approximately USD 9,110,000).
The complete catalog may be accessed here.
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