Chilean tax reform proposal to increase transfer pricing enforcement and expand specificity of acceptable methods

The Chilean Internal Revenue Service will strengthen its oversight of transfer pricing regulations as a means of keeping pace with the changing international tax landscape while striving to achieve a broader goal of expanding the country’s tax receipts to fund a variety of public sector initiatives. As outlined in a tax proposal set forth by the Chilean government in April, the incoming transfer pricing rules will provide taxpayers with specific guidance while increasing the burden and financial cost of compliance. CRA looks at the tax reform initiative and their expected results for Chilean taxpayers who transact with foreign related party counterparts.