Análisis

Sworn State­ment No. 1913

Trans­fer Pri­cing

The new sworn statement’s goal is to obtain qualitative information on the business processes and transactions of large taxpayers, for purposes of their tax compliance management.

On December 31st, 2015, the Chilean Internal Revenue Service (hereinafter referred to by its Spanish acronym, SII) published a supplement of five new sworn statements for the 2016 tax season (corresponding to commercial year 2015). For transfer pricing purposes, it is important to highlight Sworn Statement No. 1913, referred to as “Declaración Tributaria Anual de Caracterización Tributaria Global” which must be filed in addition to, and separate from, the Annual Transfer Pricing Sworn Statement No. 1907.

Entities subject to Sworn Statement No. 1913

This sworn statement is mandatory for taxpayers classified as “Large Enterprises”, such as those who are part of the SII’s payroll account for large taxpayers, and as confirmed in the SII’s resolution and in accordance with the authorization granted by Article 3 of the SII’s Organic Law, from December 31st, 2015.

Each taxpayer may verify its classification by logging into “My Tax Information/My Data” at SII’s website

Filing Date

Prior to filing Fiscal Year 2016’s income tax return (Form No. 22).

Sworn statement No. 1913 features the following sections:

  • Taxpayer identification
  • Information regarding the Group or Holding Company
  • Information regarding Corporate Reorganization
  • Information regarding Financial Instruments and/or Derivative Contracts
  • Information regarding Pre-tax Profits
  • Information regarding Capital Assets
  • Information regarding International Transactions
     

Questions for the Taxpayer

In each section, the taxpayer must answer a series of questions regarding the company’s business decision-making processes in Chile, in order to determine whether these are autonomous business actions or activities carried out by related foreign entities, as well as regarding cases in which the company received external counsel. Below are examples of some of the questions included:

  1. What percentage of your total income represents transactions carried out with related companies during the previous commercial year?
  2. Do any of the related companies mentioned in the previous question not have personnel or relevant assets involved in the transactions with companies of the Group or Holding Company?
  3. Does the company spend more than 30% of its EBITDA on royalties, interest and financial expenses, derivatives, management fees, or other concepts for the benefit of related parties?
  4. Did the company’s business scheme during the previous commercial year involve entities incorporated abroad – related or not – in order to generate an economic or tax benefit?
  5. Did the company begin implementing a business scheme involving the transfer of operations or interests in entities incorporated abroad – whether related or not –, during the previous commercial year in order to generate an economic or tax benefit?

These questions exemplify the qualitative nature of the information to be gathered, and demonstrate precisely what makes this sworn statement so innovative in comparison to other sworn statements of quantitative nature.
 

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