CHILE Law and Practice Contributed by: Javier Cortés, Juan Pablo Márquez and Gonzalo Pérez, Cortés Del Río Tax & Legal
6.3 Interaction Between Tax and Criminal Procedures The Chilean system grants the IRS the power to initi - ate criminal tax proceedings. Once the Chilean IRS decides to proceed criminally, it files a criminal complaint with the competent criminal court, which refers the matter to the Public Prosecu - tor’s Office. The criminal investigation is then conduct - ed by public prosecutors, with the Chilean IRS acting as a party to the case. The administrative and criminal proceedings may run concurrently. The 2024 Tax Reform introduced mechanisms to facilitate the prosecution of criminal cases, such as, a simplified procedure to disregard bank secrecy in the case of tax crimes, and enhanced whistle-blower protections to encourage the reporting of large-scale tax fraud schemes, among others. 7. Administrative Co-Operation 7.1 Legal Framework for Administrative Co- Operation Chile’s framework for international administrative co- operation in tax matters rests on three principal pillars: • The OECD Multilateral Convention on Mutual Administrative Assistance in Tax Matters – Chile signed the Convention in 2013 and it entered into force in 2016. The Convention provides the legal basis for information exchange (on request, spon - taneously and automatically), tax collection assis - tance and service of documents. Chile reserved the right not to provide assistance in the recovery of any tax or in the recovery of an administrative fine, with respect to all taxes, and not to provide assis - tance in the service or transmission of documents. • Bilateral double taxation agreements – the exchange of information clause contained in Chile’s DTAs provides the legal basis for on-request and spontaneous exchanges with treaty partners. • Tax information exchange agreements – Chile has concluded this kind of agreement with certain jurisdictions that do not have a full DTA in place, thereby extending the information exchange frame - work.
Domestic implementation of exchange of information commitments is provided for in Article 6 of the Tax Code, as amended by successive reforms. 7.2 Exchange of Information Clauses in Tax Agreements Chile participates in all three modalities of information exchange recognised under the OECD standards: • Exchange on request – the Chilean IRS processes requests from foreign competent authorities and submits requests to foreign authorities through the established channels under the applicable double tax treaty. • Automatic exchange – Chile participates in the automatic exchange of financial account infor - mation under the CRS. Chile also automatically exchanges CbCRs with Inclusive Framework mem - bers and receives CbCRs from other jurisdictions for Chilean MNE groups. • Spontaneous exchange – competent authority staff at the Chilean IRS identify information of potential relevance to foreign tax authorities and transmit it spontaneously, pursuant to the OECD Multilateral Convention on Mutual Administrative Assistance in Tax Matters and treaty obligations. 7.3 Other Forms of International Tax Collaboration In addition to mutual agreement procedures (MAPs) and advance pricing agreements (APAs) (see 8. Mutu- al Agreement Procedures and Arbitration and 9. Dis- pute Prevention ), Chile participates in the following forms of multilateral tax collaboration: • BEPS Inclusive Framework – Chile adheres to the G20/OECD BEPS Inclusive Framework and has committed to implementing the four mini - mum standards: CbCR, prevention of harmful tax practices, prevention of treaty abuse, and effective dispute resolution. • OECD Tax Administration Forum – Chile is an active member of the Inter-American Centre of Tax Administrations (CIAT), through which it engages in capacity building, best-practice exchange, and joint projects with other Latin American tax admin - istrations.
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