Chile

In Chile, taxpayers must file the Annual Sworn Statement on Transfer Pricing, the Sworn Statement on Country-by-Country Reporting, the Annual Sworn Statement on Master File and the Annual Sworn Statement on Local File, according to the following criteria:

Annual Transfer Pricing Affidavit

Taxpayers domiciled, resident or established in Chile who are obliged to file a tax return are obliged to do so:

• At 31 December of the relevant business year belong to medium-sized or large company segments and that in that year they have carried out transactions with related parties that are not domiciled, resident or established in Chile in accordance with local law; or,
• which, not being included in the segments indicated in the previous paragraph, during the relevant reporting period have carried out transactions with related parties that are not domiciled, resident or established in Chile, in accordance with local legislation, provided that such transactions exceed approximately CLP 500 MM - USD 520K.

It must be filed on Form 1907 by the last working day of June of each year, in respect of transactions carried out during the immediately preceding business year.

Affidavit Country-by-Country Report

They are obliged to submit it:

• Parent or controlling entity of the group of multinational enterprises (GEM) that is resident in Chile for tax purposes, to the extent that the total consolidated income of the group in the reporting period is at least EUR 750MM approx; and,
• an entity within a GEM, which is resident in Chile, that has been designated by such group as the sole substitute of the parent or controlling entity, for the purpose of filing the Country-by-Country Report in the jurisdiction of tax residence, on behalf of the multinational enterprise group.

It must be filed on Form 1937 by the last working day of June of each year in respect of transactions carried out during the immediately preceding business year.

Annual Affidavit Local Archive

Taxpayers are obliged to file the tax return if, on 31 December of the corresponding year, they meet the following copulative conditions:

• They belong to the segment of large companies according to local regulations;
• their parent or controlling entity of the GEM had to file the Country-by-Country Report with the SII and other Tax Administration for the respective tax year; and,
• That in the year they have carried out one or more transactions with related parties that are not domiciled or resident in Chile, in accordance with local regulations for amounts greater than CLP 200 MM - USD 208K approx.
• It must be filed through Form 1951 until the last working day of June of each year, in respect of the operations carried out during the immediately preceding business year.

Annual Affidavit Master File

They are obliged to submit it:

• Parent entity or generator of the GEM that is resident in Chile to the extent that the revenues of all entities that are part of the group in Chile and abroad at 31 December of the reporting year is at least EUR 750MM approx. at the time of closing the consolidated financial statements; and,
• The entity that is part of or belongs to the GEM that is resident in Chile and has been designated by the parent or controlling entity as its sole substitute for the purpose of filing the Country-by-Country Report in its country of tax residence on behalf of the parent or controlling entity.

It must be filed on Form 1950 by the last working day of June of each year, in respect of transactions carried out during the immediately preceding business year.

Customs Tax Tribunal (TTA)

While nothing prevents the SII from using so-called "secret comparables" to assess a taxpayer's Transfer Pricing compliance, it does not seem acceptable for the SII to use such confidential information to apply a Transfer Pricing method (RIT GR-18-00386-2013).

The rationale, in the sense of accounting for the economic dependence of the companies, is weak, as it should be assumed that in all cases of international transactions where there is an asymmetric relationship between buyers and sellers the SII would be empowered to establish the balance of the fair price. The standard requires measuring profitability, which the SII does not do, but instead has measured revenue (RIT 19-2012).

The rule requires considering not only the transactions carried out by the compared parties but also the reasonably relevant circumstances, considering not only the functions it performs, but also the products it trades and its special distribution characteristics (RIT GR-07-00046-2015).

The SII Circular cannot and should not be an obstacle to the granting of the extension requested within the fatal deadline for filing the DJ1907 on PT. The SII cannot argue that the deadline is untimely as the law prevents it from being considered (RIT VD-15-00075-2015).

Criteria of the Tax Administration (Internal Revenue Service)

The specific rules on Transfer Pricing are not applicable to investment funds as they do not qualify as "taxpayers" for such purposes (Oficio 3157 of 2023).

In case the service provider and the Chilean company are related according to the Chilean legal provision, the rule that establishes additional requirements with the opportunity in which the amounts paid abroad can be deducted as an expense by the local taxpayer must be taken into account (Oficio 2572 of 2022).

The differences that are affected by the single tax established in the local law generated by the SII's challenge should not be deducted in the determination of the first category RLI, until the special requirements for the deduction of expenses contained in the law are met, which does not imply double taxation of the differences generated (Oficio 1448 of 2021).

Judiciary

Foul RIT T-69-2013 - Supreme Court

To claim that any capital relationship, without the existence of other elements that demonstrate that there is control, would lead to an extensive interpretation of the rules that the legislator did not intend. The arbitration clause in the contracts or purchase and sale agreements highlighted by the SII as an indicative element of a relationship does not contain any element that could rationally be interpreted as indicative of control or a relationship between contracting companies.