The CFA Tax&Legal team summarized the main SII publications to date (February 2024).

Review the sections of this edition below:

1.- Income Tax Law Rulings
2.- Other Laws Rulings
3.- VAT Rulings
4.- Circulars and Resolutions

#Tax Law #InternalRevenueService #SII #Tax

La entrada Tax Newsletter (February 2024) se publicó primero en Chilefa.

Review the sections of this edition below:
1.- Bills.
2.- News.
3.- Labor authority’s rulings.

We highlight the following Rulings to date:

-Ruling No. 84 February 6, 2024 on Working Hours, exclusion of limitation of working hours, means of supervision and attendance registration and control systems.

-Ruling No. 67 of 01/26/2024 on Protection of maternity, paternity and family life.

-Ruling No. 81 February 1, 2024. Reports on the content and entry into force of Law No. 21,561 (“40 hours”) that modifies the Labor Code in order to reduce the working day, published in the Diario Official dated 04/26/2023.

#Labor #LaborLaw #LaborLaw #LaborManagement

La entrada Labor Law Newsletter January 2024 se publicó primero en Chilefa.

At CFA we advise our clients with the preparation of Form 22 for their correct declaration, we also support with the determination of the Taxable Net Income and the Business records according to the applicable regime, along with support in the specific Affidavits that apply for each taxpayer according to your specific operations and in general any questions or queries in this important process.

La entrada Income Tax Return Instructions Tax Year 2024 issued by Chilean Tax authority se publicó primero en Chilefa.

i) Modernization of the tax administration and the Tax and Customs Courts.

That tax administrations advance periodically in modernization processes that allow the better use of technologies in their inspection procedures: modification for the lifting of banking secrecy or notification by email in the actions of authorities.

ii) Control of informality;
Combat this large-scale practice linked to organized crime. To achieve this, measures will be promoted such as modifying the crime that punishes clandestine trade or forcing banks and financial institutions to alert when a taxpayer receives more than 50 transactions from different accounts in a month.

iii) Tax crimes;

The importance of tax morale is highlighted and substantial collaboration will be created to disrupt criminal tax structures, the anonymous whistleblower will be incorporated based on success in other jurisdictions and penalties will be increased for those who provide or use false tax documents, among other measures.

iv) Aggressive tax planning;
Taxpayers cannot illegitimately alter their tax burden, with schemes designed to avoid or reduce their tax obligations or transfer benefits to territories with lower taxation. Improvement of the general anti-avoidance rule, better application and interaction with the special anti-avoidance rules, the control rules on international taxation will be updated and the one that regulates the taxation of the SII and business reorganizations will be modernized.

v) New powers for the Taxpayer Ombudsman’s Office;
Accompaniment to taxpayers and also educate on compliance with tax obligations. Within its range of action, represent taxpayers before the Treasury or Customs; access to tax information to fulfill their functions.

vi) Regularization of tax obligations;
Its purpose is to enable taxpayers to settle their tax debts, the calculation of the interest rate will be modified and the conditions for signing payment agreements will be made more flexible. Three transitional measures are also proposed: repatriating capital, early termination of trials after payment of debt and the possibility of accessing payment agreements with remission of interest and fines.

vii) Institutional strengthening and probity.

The tax administration will be strengthened, rules on mobility and retention of Customs, Treasury, SII and Taxpayer Ombudsman personnel will be incorporated, and the officials in charge will be required to submit to a high degree of probity.

La entrada Tax Obligations Compliance Project se publicó primero en Chilefa.

The CFA Tax&Legal team summarized the main SII publications to date (January 2024).

Review the sections of this edition below:

1.- Income Tax Law Rulings
2.- Other Laws Rulings
3.- VAT Rulings
4.- Circulars and Resolutions

#Tax Law #InternalRevenueService #SII #Tax

La entrada Tax Newsletter Chilean SII January 2024 (Part 1) se publicó primero en Chilefa.

On January 8, 2024, the Financial Market Commission issued new regulations that establish the minimum mentions in the regularity and public dissemination policies of public limited and special companies registered in the Securities Registry. The provisions of General Standard No. 501 will come into force as of September 1, 2024.

What are the main guidelines of the issued standard?

The regulations address two main points regarding the content and establishment of the habituality policy of open corporations and special corporations and details the minimum matters that said policy must establish within the framework of Transactions with Related Parties.

The usual operations policy must contain:
Date of approval of the policy by the board of directors and date of the last modification.
Justification of the need to have a habitual policy considering the particular case of the company.
Characteristics and conditions that the operations must meet to be carried out under the habitual policy, indicating the reasons why each type of operation will be determined as ordinary in consideration of the business line; what will be the counterparties with which operations can be carried out; other restrictions that the board of directors may have determined; and, the maximum amount per operation so that the operation can be carried out within the framework of the habitual policy.
Control mechanisms to which the operations intended to be carried out or that have been carried out under the policy will be subject.
Person or body responsible for compliance with the control mechanisms indicated by the policy, including the circumstances that safeguard their independence of judgment.
Dissemination mechanisms.
Report on operations with related parties.

The standard establishes the duty to disseminate information; the aforementioned entities must prepare a semi-annual report of all operations with related parties and disseminate it on their website within the month following the semester they report in accordance with a standard digital format.

How will these regulations affect your company?

Contact us for personalized advice and more information about the changes you should implement.

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Summary of the standard:

Usual operations policy:

Open and special corporations in their usual operations policies with related parties must consider the following matters:

Date of approval by the Board of Directors and its last modification, kept updated periodically.
Justification of the need to have the policy, explain and support the decision to adopt a habitual policy based on the specific characteristics of the entity.
Characteristics and conditions that the operations must meet to be carried out in accordance with the habitual policy, in which they must establish:
Identification and classification of counterparties in the entity’s operations, indicating them according to their nature and relationship with the company, with the controller or its administration, also establishing whether the usual operations can only be carried out with the parent company, subsidiary, affiliate or personal specific management, also indicating the subtype of operation that is considered usual (leases, commissions, etc.).
Determination of the maximum amount per operation. In addition to the limits established by Law 18,046, it is required to specify the maximum amount per operation, expressed as a proportion of the income, expenses, equity, assets or liabilities of the company, whether individually or consolidated. In cases where the amount exceeds certain percentages (1% of assets or 10% of income), the Board of Directors must justify this possibility.
Ordinary nature of the operations according to the company’s business. Politics can only include operations considered ordinary in relation to the social sphere. It is necessary to describe each type of operation established within the policy and explain why the board considers it contributes to the social sphere. Furthermore, to be considered ordinary, operations must meet certain requirements:
Terms and conditions similar to those above
Be recurring, held at least once every 18 months in the last three years or within the framework of successive contracts, deferred execution or automatic renewal.
Not have a relevant effect on the economic, financial or legal situation of the company. Some operations are considered to have a relevant effect, such as those carried out in the liquidation of assets that compromise the solvency of the entity or within the framework of a merger, and those that represent more than 30% of the income.

La entrada CMF issues NCG on regulation of related parties operations among supervised entities se publicó primero en Chilefa.

What does the law do?
It systematizes economic crimes and attacks against the environment, modifies various legal bodies that classify crimes against the socioeconomic order, and adapts the applicable penalties (large companies).
The law defines economic crimes as those that by their nature are economic and others that become economic in certain circumstances (committed in the exercise of a position in the company or those committed by a public official at the request of someone who has a position in a company, such as bribery).
In addition, the law adds crimes against the environment in the category of economic crimes.

What other crimes become economic crimes?
The receipt, laundering and laundering of assets become considered economic crimes when the acts from which the assets come are considered economic crimes or are perpetrated in the exercise of a position, function or position in a company, or when they are committed in economic or other benefit for a company.

Who is responsible for economic crimes?

All persons criminally responsible in accordance with the general rules for an act considered an economic crime.
Persons criminally responsible in accordance with the general rules for an act considered an economic crime who, at the time of their intervention, had knowledge of the circumstances of the crime.

What rules are there to determine the ruling?
The penalty established by the specific law for the specific crime is applied. However, the determination of the sentence of imprisonment or confinement, as well as its replacement, will be made according to the provisions of the special law.
Every economic crime also carries a penalty of fine, the amount of which will be established in accordance with the special law, as well as the imposition of the disqualifications and prohibitions provided for.
The fine will be set at a number of fine-days that corresponds to the extension of the custodial or restrictive sentences of liberty. The amount of the fine will be the amount that corresponds in money to the value that the court sets for each day-fine.
There will be a formula to determine the penalty, its replacement and the amount of the fine, which will be a financial penalty proportional to the seriousness of the crime and will be calculated based on the average daily income of the convicted person.

What special rule is there for determining mitigating circumstances?
The general rules on mitigating and aggravating circumstances will not apply. There will be a special rule of diminished culpability. Among other aspects, it is related to the fact that the convicted person had not sought economic benefit from the perpetration of the act for himself or another person or that the convicted person, even though he was in positions of power in the organization, did not participate in the crime by action, but rather by omission.
It will also be considered mitigating if the damage caused was limited. It will be understood that this occurs when the total damage exceeds 40 monthly tax units and does not exceed 400 UTM.
The mitigation of previous irreproachable conduct will not be considered in economic crimes.

What rules will there be regarding highly qualified mitigating circumstances?
The following will be considered highly qualified mitigating circumstances of an economic crime:

The greatly diminished guilt of the convicted person, established whenever any of the following situations occur:

The convicted person acted in the interests of needy people or out of pressing personal need.
The convicted person promptly and voluntarily took measures aimed at preventing or substantially mitigating the generation of harm to the victim or others.
The convicted person acted under pressure and in a situation of subordination within an organization.
The convicted person acted in a subordinate situation and with limited knowledge that his actions were illegal.
That the event had an amount of trifle (little value). It will be understood like this when:

The total damage does not exceed 40 monthly tax units.
Any of the mitigating causes related to the fact that the fact has not caused damage to the fiscal interest, as well as the fact that the tax due, its interests and pecuniary penalties have been paid.

What will be the aggravating factors?

The high guilt of the convicted person, with the following assumptions:

The convicted man actively participated in an intermediate position in the organization in which the crime was perpetrated.
The convicted person abusively exercised authority or power when perpetrating the act.
The convicted person had previously been punished for perpetrating an economic crime.
A person convicted of an economic crime of violating tax regulations is found in any of the following situations: he has used tax advice, false documentation,fraudulent or adulterated, or has agreed with others to carry it out or, having the status of producer, has not issued invoices, thereby facilitating tax evasion by other taxpayers.
That the event has caused harm or reported a relevant benefit. If it exceeds 400 monthly tax units and does not exceed 40,000.

What will be the highly qualified aggravating factors?
The following are highly qualified aggravating circumstances of an economic crime:

The very high guilt of the convicted person, established whenever any of the following cases occur:

The convicted person actively participated in a senior hierarchical position in the organization in which the crime was perpetrated.
The convicted person put pressure on his subordinates in the organization to collaborate in the commission of the crime.
That the event has caused very high damage.

When the event has caused damage to natural or legal persons, public or private, that in total exceeds 40 thousand monthly tax units, or has reported a benefit of that amount.
When the event has affected the supply of essential goods or mass consumption.
When the event has abusively affected individuals who belong to a vulnerable group.
In certain actions of public officials such as the appointment of a person to a public position or function, participation in an acquisition, contracting or concession procedure that exceeds one thousand monthly tax units, the supervision of economic activities or when the aggravating circumstance of more than one doer.

Are alternative penalties applied to economic crimes?
Compliance with custodial or restrictive sentences of liberty may be replaced by the court that imposes them, with any of the following:

Conditional remission (sentence is served in freedom).
Partial confinement at home.
Partial confinement in a special establishment.

In this way, the sentence of probation is not applied for major sentences.

What conditions are set for remitted sentences?
When applying conditional remission, the court will establish a period of observation that will not be less than the duration of the sentence, with a minimum of one year and a maximum of three, and will impose the following conditions on the convicted person:

Residence in a specific place, which may be proposed by the court.
Subject to administrative control and assistance from the Chilean Gendarmerie.
Exercise of a profession, trade, employment, art, industry or commerce, if the convicted person lacks known and honest means of subsistence and does not have the status of student.

What does partial home confinement consist of?
The penalty of partial home confinement consists of confinement in the condemned person’s home. Partial confinement may be daytime or weekend.
Daytime confinement is confinement in the condemned person’s home, for a period of eight continuous hours a day, which will be set between eight and twenty-two hours.
Weekend confinement will consist of confinement in the condemned man’s home between 10 p.m. on Friday and 6 a.m. on the following Monday.

What is partial confinement in a special establishment?
The penalty of partial confinement in a special establishment consists of confinement in a place specially designed for this purpose for 56 hours per week.

What does the law determine about attacks against the environment?
Anyone who, without having submitted their activity to an environmental impact evaluation and knowing that they are obliged to do so, will be punished with imprisonment or minor confinement in its minimum to medium degrees (61 days to three years):

Dump polluting substances into maritime or continental waters.
Extract continental waters, whether surface or underground, or maritime waters.
Pour or deposit polluting substances on the ground or subsoil, continental or maritime.
Dump soil or other solids into wetlands.
Extract components from the soil or subsoil.
Release polluting substances into the air.

The penalty will be imprisonment or minor confinement in its medium to maximum degrees (541 days to 5 years) if the offender perpetrates the act and is obliged to submit his activity to an environmental impact study.

What penalties will be applicable to the legal person (companies or entities)?

The extinction of the legal entity.
Disqualification from contracting with the State.
The loss of tax benefits and the prohibition of receiving them.
Supervision of the legal entity.
The fine.
The publication of an extract of the conviction.

Tax Implications of the Economic Crimes Law.

Special attention to the analysis regarding the tax crimes existing in the Tax Code (“CT”) since the crimes established in the same CT will have an expansion of the people who can commit them, along with greater penalties, being classified as economic crimes of “Second Category”:

(i) “in the exercise of a position, function or position in a company”; either
(ii) “for economic or other benefit” to a company.

Regarding criminal prosecution, as currently in force, a prior complaint or complaint must be made by the Director of the SII or the CDE.

Tax Crimes that are considered in this Law.

The crimes enshrined in the fourth paragraph of article 8 ter; numbers 4, 5, 8, 9, 12, 13, 14, 18, 22, 23, 24, 25 and 26 of article 97, and article 100, all of the Tax Code, will be within the catalog of Second-Class Economic Crimes Category.

1.- Malicious presentation of a sworn statement of simple existence of address, effectiveness of the facilities, with false data or background (Art. 8 ter, paragraph 4 of the Tax Code).

2.- Tax evasion obtained by maliciously false or incomplete declaration (Art. 97 No. 4, paragraph 1, of the Tax Code).

3.- Fraudulent obtaining of tax refunds (Art. 97 No. 4, paragraph 3, of the Tax Code).

4.-Maliciously providing false data in the initial declaration or in declarations to stamp documents (Art. 97 No. 23, paragraph 1, of the Tax Code).

5.- Concertedly facilitate the means to maliciously include false data in the indicated declarations (Art. 97 No. 23, paragraph 2, of the Tax Code).

6.- Crimes related to Invoices and Value Added Tax (“VAT”):
Malicious maneuvers to increase the amount of credits or imputations, in VAT and withholding or surcharge taxes (Art. 97 No. 4, paragraph 2, of the Tax Code).

7.- Malicious preparation or sale of invoices or other tax documents, for the commission of tax crimes (Art. 97 No. 4, paragraph 5, of the Tax Code).

8.- Malicious use of invoices or other false documents (Art. 97 No. 4, paragraph 4, of the Tax Code).

9.- Crimes related to Donations: Receiving fraudulently and repeatedly, consideration for donations that grant tax benefits. Simulate said donations (Art. 97 No. 24, paragraph 1, of the Tax Code).

10.- Deceitfully allocating donations that grant tax benefits for purposes other than those for which they correspond (Art. 97 No. 24, paragraph 2, of the Tax Code).

11.- Defraudingly and repeatedly deducting, as first category expenses, donations that the law does not allow.
authorizes (Art. 97 No. 24, paragraph 3, of the Tax Code).

12.- Trade in merchandise, securities or species that have not paid the corresponding tax
(Art. 97 No. 8 of the Tax Code).

13.- Reopening of an establishment closed by the SII (Art. 97 No. 12 of the Tax Code).

14.- The effectively clandestine exercise of commerce or industry (Art. 97 No. 9 of the Tax Code).

15.- Subtraction, concealment or disposal of species retained in the possession of the offender by the SII (Art. 97 No. 14 of the Tax Code).

16.- Destruction or alteration of seals or locks placed by the SII (Art. 97 No. 13 of the Tax Code).

17.- Malicious use, to defraud the Treasury, of true stamps or other technological means of authorization of the SII (Art. 97 No. 22 of the Tax Code).

18.- Accountants who commit falsehood or fraudulent acts when signing the client’s statements or balance sheets (Art. 100 of the Tax Code).

19.- Sale or supply of compressed natural gas or liquefied petroleum gas for vehicular consumption, understood as those carried out by people who do not have the authorizations established in the fourth paragraph of article 2 of Law No. 18,502. (Art. 97 No. 26 of the Tax Code).

20.- Illegal purchase and sale of tax control strips or tickets to public shows (Art. 97 No. 18 of the Tax Code).

21.- Acting as a Free Trade Zone user without being authorized or using the authorization to defraud to the Treasury (Art. 97 No. 25 paragraph 1, of the Tax Code).

22.- Carry out transactions with a Free Zone user knowing that they lack authorization (Art.97 N°25, paragraph 2, of the Tax Code).

La entrada Law on Economic Crimes and Tax Crimes se publicó primero en Chilefa.

This will facilitate the application for visas and other procedures, since it will be easier to issue documents between Mainland China and Chile, and legalization in consulates and any public document signed in one of these countries will no longer be mandatory, opening greater opportunities for a more expeditious migration and strengthening business both in Chile and China.

La entrada Hague Apostille Convention. Mainland China. se publicó primero en Chilefa.

SERNAC may impose sanctions and corrective measures, such as the cessation of offending conduct and the restitution of undue charges. In addition, it seeks to streamline the claims management process and apply fines to companies that do not resolve problems in a timely manner.

The sanctioning procedure can be initiated by SERNAC or by complaints from consumers, guaranteeing compliance with the law and protecting consumers.

He reviews more about the bill and its processing in the following links:

https://www.sernac.cl/portal/604/w3-propertyname-788.html

https://www.camara.cl/legislacion/ProyectosDeLey/tramitacion.aspx?prmID=16826&prmBOLETIN=16271-03

La entrada Bill that strengthens SERNAC se publicó primero en Chilefa.

During the day of Monday, May 8, 2023, the Chamber of Deputies sent to the Senate with changes the bill that regulates the protection and processing of personal data, and also managed the creation of the Personal Data Protection Agency.

The project was presented before the Constitution and Finance commissions, by deputies Leonardo Soto (PS) and Miguel Mellado (RN) and seeks to establish a stricter regulation of the obligations, duties and responsibilities of people who process personal data regarding of the current regulation.

The proposed law seeks to ensure that the processing is carried out with the consent of the data owner or in cases where the law authorizes it, ensuring that standards of quality, information, transparency and security are ensured.

For its part, the Personal Data Protection Agency seeks to be a decentralized body that will aim to ensure the effective protection of the rights that guarantee the private life of people and their personal data.

Regarding the rights of individuals, the proposal defines that “every person has the right of access, rectification, deletion, opposition, portability and blocking of their personal data”, since, “such rights are personal, non-transferable and inalienable and cannot be waived.” They may be limited by any act or convention.”

MAIN ASPECTS

The initiative contemplates, among other aspects:

It provides the country with modern and flexible legislation in the processing of personal data, in line with the international commitments acquired with the country’s incorporation into the OECD.

Improve legal standards, the country will have adequate levels of protection and security in data processing, promoting the development of the digital economy and favoring the expansion of the global services market.

It reinforces the rights of people in relation to the processing of their personal data (the so-called “ARCO rights”), and introduces new rights linked to the digital society, such as the right to the portability of personal data and the right to object to evaluations. automated personal data (called “profiling”).

ARCO rights have been understood as:

Right of access or information: You can request information about your data, such as the purpose of its storage.

Right to rectification or modification, with which you can request that your data be modified when it is erroneous, inaccurate, equivocal or incomplete.

Right of cancellation or deletion, to delete your data under certain causes, even if you have provided it voluntarily or its treatment does not have a legal basis.

Right to object, to stop using your data for advertising, market research or opinion surveys.

Right to block, for the temporary suspension of a data processing operation under certain causes. This right will apply, for example, if you want your data to no longer appear in a decision of the CPLT that resolves a protection of the right of access to information.

The Bill strengthens the international transfer of data within a framework of security, protection and reciprocity.

It redefines the standards for data processing by public bodies, imposing principles, rights and obligations, and an expeditious mechanism so that people can exercise their rights and punish possible infractions.

Creates a control authority called “Personal Data Protection Agency”, directed by a collegiate body. It is a public, autonomous corporation, of a technical nature, in charge of ensuring the protection of the rights and freedoms of data owners, and of regulating and supervising the processing of these data.

It contemplates a law compliance model that incorporates a catalog of infractions and sanctions, an infraction procedure, judicial claims and a system that prevents and encourages voluntary compliance with the law.

La entrada Data Protection Bill se publicó primero en Chilefa.