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Details

  • Service: Tax
  • Type: Business and industry issue, Video
  • Date: 10/15/2012
  • Length: 4:05 Minutes

Latest tax news from Chile 

Rodrigo Stein, Partner, Tax, KPMG in Chile:

My name is Rodrigo Stein. I am a tax partner at KPMG Chile, based in Santiago, in charge of corporate tax international.

What insights can you provide on Chile’s economy?

Well, there is a lot of going on in Chile right now. The economy is very dynamic, a lot of growth, but at the same time there is a lot of social demands and pressure for the government to spend more. So that means more pressure and raising taxes and revenue.

What are the specific tax issues?

Because of this pressure on increasing revenues, there have been tax reforms being proposed, and actually there has been a big change approved by congress a month ago, a little bit more than a month ago. But it’s been enacted and it’s becoming effective, you know, throughout these couple of months and starting next year as well.


There are several changes. There is for start, an increase in the corporate tax rate, from 17 percent to 20 percent. So that’s a big change. Also there have been minor tax reductions, moreover for benefitting individuals. But there is a big focus on tax, it is thought of tax arbitrage and proper tax planning strategies.

How are companies dealing with this situation?

I think it is early to say, because it has been very recent and it’s been a very substantial change. So we are helping clients understand the stated implication of this tax reform, but also everyday we are seeing that more unintended things that are coming up and consequences that nobody thought about. So it’s been a lot of work. Complex, but the main thing is that it’s something that you have to worry about if you haven’t started thinking about it yet.

What new challenges do you think companies will have to take on in the near future?

For start, increased compliance costs. For example one of the big changes is the introduction of more up-to-date transfer pricing rules that impose on the taxpayer a very big burden in terms of keeping appropriate documentation of all of their transactions with related parties. So if you are within a multinational group, that means you have to be very careful in having set up proper documentation, keeping that documentation, and also preparing the information that you will be required to share with the tax authorities.


In general, there is this feeling that there is going to always be more and more pressure on large multinationals, large companies, and wealthier individuals to pay more and more taxes, and to help, if you could say, the government fund social programs, public education, health, and that means there is more and more pressure on companies. So because there is a general perception that big companies and conglomerates and multinationals are not paying their fair share of taxes. And even though there is always room for more, it is important that companies and multinationals do a good job in showing that they are making a big contribution.

Rodrigo Stein, a Tax Partner with KPMG in Chile takes a close look at the latest tax issues and trends in Chile

 

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Iberoamerica Tax Summit 2012

Tax views
Videos and articles on views captured at the Iberoamerica Tax Summit 2012.