By CCT | Center for Tax Knowledge

Just like those who move house, moving their furniture and belongings, each new government move house, moving their furniture and belongings, each new government that arrives at La Moneda does so with a series of projects of various kinds in its luggage.

And beyond political colors, what is certain is that all these initiatives have something in common: the need for financing of public spendingThis is obtained -to a large extent- with the taxes paid by individuals and companies for the activities they carry out and the income they generate.

Therefore, the tax issue tax has been on the agenda of all recent governments in Chile, and the administration of President Gabriel Boric is no exception.

Fiscal Pact

During the first months of this administration, attention was focused on the constitutional process. However, in July 2022, the Executive sent to the Congress a draft of the Tax Reformwhich was rejected in its idea of legislation in March 2023.

After this setback, the initiative was subject to adjustments and negotiations, giving rise to a new bill that focused on one of the central axes of the original initiative: the fight against tax evasion and avoidance. tax evasion and avoidanceThe amendments to income taxation were left for a second stage.

Thus, after going through a long legislative path during this year 2024, last September 25, the Chamber of Deputies passed into law the bill of Compliance with Tax Obligationsan initiative that falls within the framework of the so-called Fiscal Pact for Development and which aims to achieve a tax collection equivalent to 1.5% of the Gross Domestic Product (GDP).

Main changes

While waiting to be enacted into law (which should happen in the near future), the Tax Compliance Bill has been the subject of analysis, technical summaries and comments from different actors in the tax field.

Among its main changes and changes and provisionsAmong its main changes and provisions, it is worth mentioning, among others:

• Voluntary and extraordinary procedure for the declaration of assets or income abroad, whose tax situation may be regularized with a single substitute tax at a rate of 12%. This option, if applicable, may be exercised until November 30, 2024.

• Incorporation of a simplified procedure for the lifting of bank secrecy -without opposition by the taxpayer- and modification of the associated general judicial procedure.

• New obligation for banks and other institutions to provide periodic information to the Internal Revenue Service (SII) on the amount of credits received by account holders (individuals, legal entities and affectation estates).

• Measures to ensure the traceability of purchase and sale transactions carried out with cash.

• Modifications aimed at resolving a series of difficulties in the application of the so-called luxury tax.

In this regard, and for strictly informative purposes, the SII published on its website a note pointing out some of the scope of these modifications.

Once the law has been published in the Official Gazette, the tax authority will proceed to issue the instructions instructions instructions regarding its application.