New Chilean regulations on the common reporting standard

The first related to the reporting of financial accounts under the OECD's common reporting standard (CRS) (Resolution 48 dated May 31 2018), and the second referred to trust reporting affidavit instructions (Resolution 46 dated May 18 2018).

Chile signed the Convention on Mutual Administrative Assistance in Tax Matters (MAAT) on October 24 2013. Since then, the required legal framework for the introduction of the automatic exchange of financial accounts information has been going through its final implementation stage, as Chile has committed to performing its first exchange in 2018.

In this regard, Chile signed the Multilateral Competent Authority Agreement for the Common Reporting Standard (CRS MCAA) on June 4 2015, and later on adopted the CRS under Decree 418 (2017), which aimed at setting forth "the regulation of the obligations for financial institutions to review and identify financial accounts related to individuals with foreign tax residency".

Primary legislation was introduced in late 2017 under Law 21.047 which incorporated Article 62-ter into the Chilean Tax Code and granted the IRS the authority to require information from qualified financial institutions that they hold regarding titleholders on financial accounts or their controllers with foreign tax residency (a much broader description is included in Article 62-ter).

Article 62-ter also establishes that financial institutions must submit the information to the Chilean IRS on June 30 of each year, following certain reporting criteria as dictated by the Chilean IRS.

Indeed, Resolution 48 dated May 31 2018 indicates that the information that must be submitted to the Chilean IRS by the qualified financial institutions must include: (i) information on financial accounts opened from July 1 to December 31 of 2017; (ii) information regarding pre-existing individuals´ accounts of major value; and iii) pre-existing accounts that until June 30 have been identified as accounts related to persons with foreign tax residency.

Information regarding pre-existing accounts must include the information from June 30 to December 31 of 2017. Special provisions are also included regarding pre-existing accounts of lower value.

The information must be submitted using the 'CRS XML Schema' with the corresponding adjustments made by the Chilean IRS, and sent through its website.

It is critical that financial institutions finalise their due diligence procedures and be duly prepared for the imminent reporting stage that will take place as from September 2018.