By Francisco Orellana, Partner of the Legal and Tax-Aduana Defense Area at CCL Auditores Consultores and President of the Chilean Institute of Customs Law.
Read the column in La Tercera.
For more than a month, the Tax Compliance Bill has been in its second legislative stage in the Senate’s Finance Committee. As a result, the Government has had to present a fast-track agenda of economic initiatives to expedite the processing of this and other bills, setting a deadline for approval and enactment into law before the end of September.
The delay in the processing of this bill is an opportunity to thoroughly review and analyze all of its articles before they are approved and enacted into law. This analysis addresses both positive aspects and others that have been questioned within the customs regulations included in the initiative, which have not been examined in sufficient depth in the various political, parliamentary, and academic discussion forums surrounding this bill, but have been analyzed by stakeholders in Chilean foreign trade.
First, the bill brings good news. This is because it establishes new rights for taxpayers who interact with the National Customs Service, putting an end to a longstanding and unusual distinction whereby only taxpayers dealing with the Internal Revenue Service benefited from a privileged framework of rights and protection mechanisms. The bill seeks to equalize the situation and rights of foreign trade agents in their relationship with the National Customs Service, aligning them with those of taxpayers who interact with the Internal Revenue Service.
On the other hand, the bill makes further progress in harmonizing certain customs and tax procedures, providing greater certainty to taxpayers in resolving disputes with tax and customs authorities. It also addresses complex transfer pricing adjustments in imports and their linkage with transfer pricing rules.
However, as a counterpart, the initiative also contains some questionable aspects, particularly in sanctioning matters, as it increases the severity of penalties for mere infractions without providing or clearly stating an objective basis for granting the National Customs Service the authority to impose harsher penalties on taxpayers for simple errors in customs processing, thereby deviating in this area from the sanctioning criteria and fiscal policy of the Internal Revenue Service.
For the customs sector, it is of utmost importance that this bill reaches completion in the best possible way, incorporating the views of experts and stakeholders such as Customs Brokers, Warehouse Operators, Free Trade Zone Users, Importers, and Exporters, among others, who are precisely those affected by the application of these rules. It is expected that this will be reflected in the Senate’s Finance Committee, where representatives from the private sector, trade associations, and the public sector have participated through public hearings, all of whom play a key role in the application of the Customs Ordinance and other customs regulatory frameworks.