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Tax Insights

Tax Insights

News and analysis for informed decision-making.

Transfer Pricing: Chile’s Internal Revenue Service (SII) Steps Up Enforcement

Precios de transferencia: el SII intensifica la fiscalización

Cross-border transactions between related companies are playing an increasingly important role in the enforcement strategy of Chile’s Internal Revenue Service.

During 2025, the SII conducted 125 transfer pricing audits, generating more than CLP 94 billion in tax collections, with an average yield of more than CLP 752 million per audit.

Regulations require related-party transactions to be conducted on terms comparable to those that would have been agreed between independent parties. Intercompany purchases of goods and services, loans, royalties, reorganizations, and intangible assets are among the areas receiving the agency’s closest attention.

Tax enforcement is moving toward a model based on data and risk profiles. Recurring losses, non-arm’s-length margins, transactions involving low-tax jurisdictions, or inconsistencies between financial and tax information may increase the likelihood of review.

What should companies review?

  • Intercompany agreements and services.
  • Margins earned in Chile and royalty payments.
  • Consistency between tax filings and economic substance.
  • Loans, interest rates, and financing arrangements.
  • International reorganizations.

Bustos Tax & Legal recommends reviewing these matters before any potential tax audit and maintaining documentation sufficient to substantiate the nature and economic terms of each transaction.

Read the full analysis

Source: Chilean Internal Revenue Service

Gifts and Estate Succession: An Opportunity That Requires Planning

Donaciones y sucesión: una oportunidad que exige planificación

Changes to the rules governing gifts create a significant window of opportunity for business owners and families considering an anticipated wealth transfer or succession.

The Reconstruction Law provides a temporary benefit that allows, subject to certain requirements, a 50% reduction in the tax applicable to certain gifts. However, a lower tax burden does not mean the decision should be made solely from a tax perspective.

Before transferring ownership interests, investments, real estate, or other assets, it is essential to analyze control of the estate, management of the companies, the donor’s economic rights, and the relationships among family members.

What should be considered before making a gift?

  • Composition and valuation of the estate.
  • Control and management of family companies.
  • Tax consequences and economic rationale.
  • Beneficiaries and effects on a future estate succession.
  • Usufruct or other reservations of rights.

A sound estate strategy should integrate tax, corporate, succession, and family considerations, ensuring that the chosen structure remains sustainable over time.

Read the full analysis

Sources: Diario Financiero and legislative background to the Reconstruction Law.

Corporate Tax Rate Reduction: Pay Attention to Deferred Taxes

Rebaja del impuesto corporativo: atención a los impuestos diferidos

The gradual reduction in the First Category Tax represents good news for the future tax burden, but it may also produce accounting effects that should be assessed in advance.

The Reconstruction Law provides for a gradual reduction in the corporate tax rate: from 27% in 2026 to 25.5% in 2027, 24% in 2028, and 23% beginning in 2029.

If a company has a tax loss of CLP 1 billion and expects to recover the benefit using a 27% rate, the deferred tax asset could reach CLP 270 million. At a 23% rate, that same future benefit could fall to CLP 230 million.

The difference must be analyzed for accounting purposes and may affect earnings and equity, even when there is no immediate cash outflow.

What should companies review?

  • Recognized deferred tax assets.
  • Realistic expectations of recovery.
  • Effects on financial indicators and covenants.
  • The rate used to measure them.
  • Impact on earnings and equity.

The corporate tax reduction should not be analyzed solely from the perspective of lower future taxes; it may require significant adjustments to the financial statements.

Read the full analysis

Source: Diario Financiero, August 2026.

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