Tax Sustainability: From Regulatory Novelty to Consolidation

Chile has already taken a significant step by placing tax governance at the center of the tax discussion. The debate is no longer whether the regulation was necessary, but rather how to turn its promise into a practice that delivers greater certainty, trust, and real impact.

From Compliance to High-Quality Tax Decision-Making

Tax sustainability ceased long ago to be merely a striking label and has instead become a meaningful regulatory signal. With the incorporation of Article 8 No. 18 into the Chilean Tax Code through Law No. 21.713 on Tax Compliance, published on October 24, 2024, and its subsequent development by the Chilean Internal Revenue Service (SII), Chile initiated an uncommon discussion in tax matters: the possibility that compliance should not be measured solely by the formal preparation of tax returns or by the intensity of audits, but also by the quality of governance supporting tax decisions.

This shift deserves recognition. In a system where the relationship between taxpayers and the tax authority has traditionally been viewed through the lens of audits, disputes, and contingencies, introducing a framework that rewards transparency, internal controls, and cooperation is not a minor adjustment. Rather, it represents a different way of understanding the tax function within companies and redefining the relationship with the authorities.

Moreover, the initiative did not remain merely declaratory. During 2025, the SII developed a regulatory framework that now allows this system to be considered operational. Circular No. 6 provided the interpretative framework, while Exempt Resolutions No. 70, 71, and 72 completed the structure by establishing: a registry for independent certifying entities, the annual certification procedure, and rules governing cooperation agreements with business groups. From this perspective, it would be unfair to claim that tax sustainability remains a vague aspiration. Today, there are procedures, requirements, registries, and concrete institutional effects already in place.

This development is important for another reason as well. The regulation helps move tax management out of a purely technical sphere and place it where it arguably always belonged: within boardroom discussions, risk management, and organizational control structures. A company seeking certification under this framework must not only pay taxes correctly; it must also demonstrate that it has policies, traceability, defined responsibilities, and oversight mechanisms consistent with the strategic importance of tax matters.

In this sense, tax sustainability has a merit that goes beyond its regulatory details: it raises the standard of what we understand as good compliance. In a market where tax matters were often treated as merely reactive issues for many years, this represents progress worthy of serious consideration.

That said, sound regulatory direction alone does not eliminate questions regarding implementation. The system remains in an early and gradual stage and, for now, is more visible among highly sophisticated market segments than across the broader market. This is not surprising. Governance requirements, risk matrices, control documentation, and tax strategy evaluations align much more naturally with large business groups than with mid-sized taxpayers or less institutionalized structures.

This does not discredit the regulation. Rather, it confirms that adoption will inevitably be uneven and that consolidation will depend on how the system broadens its practical legitimacy. Tax sustainability could become one of the most valuable innovations in the Chilean tax system, but to achieve that, it must demonstrate that it will not become merely a premium standard reserved for organizations that already possess sufficient resources, advisory capacity, and corporate maturity to comply with minimal friction.

This is where the challenge of the next phase emerges.

The first challenge is conceptual. Although the term may suggest alignment with ESG (Environmental, Social, and Governance) principles or with reputational frameworks, the core of the model lies elsewhere: tax governance, internal control, transparency, and sound tax risk management. This distinction matters because it determines whether the market understands that this is not simply a positive narrative, but rather a demanding organizational discipline.

The second challenge relates to incentives. The resolutions have provided greater procedural certainty, yet there remains legitimate interest in understanding more clearly what the practical benefits of participating in this framework will be. A cooperative system only gains traction when transparency is not perceived as additional exposure, but rather as a reasonable way to reduce friction, improve relationships with the authorities, and strengthen predictability in the tax environment.

The third challenge concerns consistency. Certain criteria associated with certification — such as evaluating governance practices or tax contribution parameters — will require homogeneous, understandable, and objectively verifiable application. Not because standards should be lowered, but because a framework of this nature only consolidates when it combines technical sophistication with rules sufficiently clear for the market.

There is also another decisive factor: the breadth of the ecosystem. Tax sustainability will gain institutional depth to the extent that there are visible cases, positive experiences, recognized criteria, and gradual expansion toward taxpayers of different sizes. In other words, its future legitimacy will depend less on additional regulation and more on evidence that the model can function effectively, rigorously, and with accessibility in mind.

Seen this way, the current moment should not be interpreted as a stage of distrust, but rather as a phase of consolidation. The novelty has already been absorbed into the regulation; now practice must confirm its potential. Naturally, this transition requires a critical perspective. But useful criticism does not dismiss progress — it pushes it toward its best possible version.

Chile has already accomplished something uncommon in tax matters: shifting the conversation from mere enforcement toward the institutional quality of compliance. That is positive news. The pending challenge is ensuring that this innovation translates into greater certainty, more trust, and better standards for a broader universe of taxpayers. Ultimately, that is where the true success of tax sustainability will be determined.

Integration of Internal Audit Methodologies into Reviews of the Crime Prevention Model (MPD)

Originally, Law No. 20.393 allowed the adequacy of the model to be demonstrated through certifications issued by specialized entities registered with the Financial Market Commission (CMF), with the aim of creating a limited external verification standard regarding the prevention model. However, with the evolution of the regulatory framework — particularly following the enactment of Law No. 21.595 — there has been a shift toward an approach more focused on evaluating the actual functioning of the model, gradually moving emphasis away from formal certification and toward independent reviews based on criteria aimed at assessing operational effectiveness.

This shift in focus has raised new questions. One of the main concerns is the absence of a clear legal standard regarding the scope and methodology these independent reviews should follow. The regulation does not precisely define what constitutes an “independent evaluation,” the minimum criteria it should consider, or the types of procedures that should be applied to assess the effectiveness of the model.

This lack of standardization provides flexibility, allowing evaluations to adapt to the diversity of companies across different economic sectors, organizational sizes, and levels of exposure to criminal risk. From this perspective, imposing rigid criteria could create unnecessary financial and regulatory burdens while reducing the ability of compliance models to evolve according to the specific characteristics of each organization.

In this context, incorporating internal audit methodologies and principles into review processes conducted by independent third parties for the Crime Prevention Model (MPD) becomes particularly relevant, as it significantly strengthens the technical quality, objectivity, and usefulness of these evaluations for organizations.

First, applying structured internal audit methodologies — particularly those based on risk management — enables MPD reviews to be conducted through systematic procedures aimed at identifying, analyzing, and evaluating criminal risks relevant to the organization. This approach facilitates a more rigorous assessment of both the design and operation of preventive controls established within the model.

Second, adopting core internal audit principles such as independence, objectivity, due professional care, and an evidence-based approach provides independent reviews with a recognized methodological framework in matters of internal control and corporate governance. This allows the conclusions derived from the evaluation to achieve greater credibility and technical robustness.

Likewise, the use of internal audit techniques — including compliance testing, control analysis, document review, interviews, and substantive testing — makes it possible to verify not only the formal existence of MPD components, but also their effective implementation and operational functioning within the organization.

Another significant benefit lies in the alignment between independent reviews and the organization’s internal control and monitoring systems, facilitating the integration of evaluation results into internal audit plans, criminal risk management processes, and continuous improvement mechanisms. Additionally, the application of internal audit methodologies enables the preparation of evaluation reports with greater technical traceability.

Finally, the convergence between independent reviews and internal audit principles contributes to strengthening the governance of the Crime Prevention Model by providing boards of directors, audit committees, and senior management with objective and technically supported information regarding the effectiveness of the prevention system.

Consequently, integrating internal audit methodologies into reviews conducted by independent third parties helps consolidate more rigorous, comparable, and continuous improvement-oriented evaluations of the MPD, thereby strengthening organizations’ ability to prevent, detect, and manage corporate criminal risks.