As discussed in our previous journals, transfer pricing rules in Chile have recently been brought into line with OECD standards.
The reforms introduce a new system aimed to collect more taxes and avoid evasive planning by companies and are designed to be in line with OECD guidelines. The law also introduces new penalties and sanctions for breaches of the law.
Parties must ensure that transactions between related entities are conducted at “arm’s length”. In order to demonstrate how transaction values are arrived at, parties may submit a transfer pricing study to the Chilean Taxation Office or Servicio de Impuestos Internos (SII).
In addition, if involved in transactions with related entities, acompany must file an annual statement to the SII with certain required information. Failure to do so (or the provision of false information) is punishable by a fine of between 10 to 50 UTM.
We also recommend that Companies have an intercompany “Services Agreement” in place governing transactions with related entities in case of an audit by the SII.
HarrisGómez Group is able to assist you in gaining a better understanding the new reforms but is also able to advise on how to best structure your company to take advantage of the new reforms.