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Chile Leads the Fight Against Tax Avoidance

26 Jul 2010

President Pi?era?s administration, as part of their economic programme to reduce tax avoidance, are considering the execution of Tax Information Exchange Agreements (TIEAs) with tax havens to complement the extensive network of Double Taxation Agreements already in force. These TIEAs will help combat the fight against tax avoidance, a hot topic currently under scrutiny in Chile. Tax havens under the spotlight include: Bermudas, Cayman Islands, Jersey, Liechtenstein, Panama and the Virgin Islands. Taxand Chile explores the main focus for Chile in its fight against tax avoidance.

The Chilean government is looking for greater transparency when accessing income kept abroad by Chilean residents to verify if the corresponding taxes are actually being declared and paid in Chile.

Having measures in place to acquire this information from Chilean residents will develop a healthier and more transparent economy enabling the Chilean governments to lead the fight against fiscal avoidance.

Currently there are 21 double taxation agreements in force and 6 additional treaties are signed and pending ratification by Congress, including treaties with the US and Australia. 12 additional Double Taxation Agreements are under negotiation with one ready to be signed. With the exception of the treaty with Argentina all double taxation agreements in force follow the OECD model.

Taxand's Take

The Chilean Tax Authorities main focus is on income kept abroad by Chilean residents. With Double Taxation Agreements high on the agenda, many signed and more waiting in the wings pending ratification its only a matter of time before the Chilean Government will be initiating TIEAs in a bid to clamp down further on tax avoidance.

Your Taxand contacts for further queries are:
Carola Trucco
T. +56 2 378 8933

Cristi?n Sep?lveda
T. +56 2 378 8933

Taxand's Take Author