Chile on the front lines of country-by-country reporting
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Chile on the front lines of country-by-country reporting

Chile is among the first countries requiring multinational companies to file a country-by-country report, explain Roberto Carlos Rivas and María Carolina Camargo of PwC.

In its strong commitment to be aligned with the new OECD guidelines – BEPS Action 13, the Chilean tax authority has issued new internal legislative and administrative regulations allowing it to go ahead with the international objective of mutual administrative support and transparence in fiscal matters. Also, Chile will be one of the first jurisdictions to receive the filing of the CbC report in June 2017.

Convention on Mutual Administrative Assistance in Tax Matters

The Convention on Mutual Administrative Assistance in Tax matters was signed by Chile in October 2013. The purpose of this convention has been that the contracting parties take measures for international cooperation taking into account the protection to confidentiality of information and privacy of personal data flow. Such instrument was internally enacted through Decree No. 104 of the Ministry of Foreign Affairs on July 20 2016, with Chile becoming the 59th country to sign the agreement at that time.

According to the convention, the signatory states can have access to every kind of mutual assistance such as: exchange of information upon request, spontaneous exchange of information, tax audits abroad, simultaneous tax audits and assistance on tax collection, while the taxpayer rights are protected. Likewise, it makes it possible to perform automatic exchange of information while an agreement between the parties in interest is required.

The convention's regulation will take effect for the administrative assistance relating to tax years starting on or from the year following that in which the agreement comes into force. Thus, in the particular case of Chile, the information exchange will begin in the commercial year 2017 (tax year 2018).

The signatory states can exchange any information expected to be relevant for the tax administration or application of their internal legislation with regard to the taxes comprised in the agreement. In the Chilean case, these will comprise the income tax, VAT and tax on inheritance and donations.

Multilateral Competent Authority Agreement on Exchange of Country-by-Country Reports over global operations of multinational enterprises

The states signatory to the above convention have signed two mutual agreements to implement the automatic exchange of information:

i) The Multilateral Competent Authority Agreement on Automatic Exchange of Financial Account Information (CRS MCAA), which establishes a common standard of automatic exchange of financial information; and

ii) The Multilateral Competent Authority Agreement on Country-by-Country Reporting (CbCR MCAA), which establishes the way in which the competent signatory authorities will perform the exchange of country-by-country reports presented by the parent entities of multinational groups in their jurisdiction.

Chile has signed both agreements. In particular, on January 2016, Chile subscribed to the Multilateral Agreement between Competent Authorities for the CbCR and, on December 2016, the Chilean IRS issued Resolution No. 126, establishing in detail the obligation of filing a new annual transfer pricing return (Form No. 1937) containing the CbCR for MNE based in our country.

The actual filing of the CbCR in Chile

Resolution No. 126 introduces new regulations setting out Transfer Pricing Return No. 1937, which contains CbC reporting. The obligation to submit the annual transfer pricing return applies to the parent or controlling company of a multinational enterprise (MNE) group with residence in Chile for tax purposes, with a consolidated turnover of €750 million ($799 million) or more in the previous 12 months.

Surrogate parent entity of the MNE group with residence in Chile for tax purposes that has been appointed by the parent for the controlled entity of the group, as a sole substitute in order to file the annual transfer pricing return.

Surprisingly, according to the new regulation, the new CbCR (Form 1937) must be submitted to the Chilean IRS before June 30 2017, with respect to information regarding commercial year 2016. Such deadline can be extended once for a period of three months. As such, Chile will be among the first countries requiring a country-by-country report.

The new resolution applies penalties for non-compliance for both transfer pricing returns, ranging from 10 to 50 annual tax units (approximately $10,000-$50,000) without exceeding the upper limit of between 15% of the taxpayer's equity or 5% of the effective capital, whichever is greater.

The information in the new annual transfer pricing return regarding CbCR is mostly analogous to the BEPS model template and requires the following financial and tax elements for each entity of the MNE group:

  • The gross income of the MNE's groups differentiating between that earned via related entities and that earned via unrelated parties;

  • Profit (loss) before income tax or taxes;

  • Income tax paid (on cash basis), including withholding taxes incurred;

  • Income tax accrued (current year), excluding deferred taxes or unrealised tax accruals;

  • Statutory paid-in capital;

  • Accumulated earnings;

  • Number of employees;

  • Tangible assets, other than cash and cash equivalents;

  • List of resident entities, including permanent establishments and core activities carried out by each entity; and

  • Other information considered relevant and an explanation, if warranted, of the data included.

At the moment, the Chilean IRS has not issued any regulation related to master file and local file, notwithstanding, the taxpayers must be alert in case further regulations would eventually be issued.



Roberto Carlos Rivas


Tel: +56 2 29400116

During 2001 and 2002 Roberto Carlos Rivas obtained a master's in law degree in international taxation at Leiden University, the Netherlands.

During years 2002 and 2003 he was attached on a secondment to the International Taxation Department of PricewaterhouseCoopers, Rotterdam, the Netherlands, taking active part in international tax planning projects concerning investments between Europe and Latin America.

Roberto joined PricewaterhouseCoopers in April 1993 and he has also been assigned to PwC Buenos Aires until May 2004. He is a transfer pricing expert.

He is member of the International Fiscal Association in Chile and he has written many articles on international tax matters. He has been lecturer in international tax seminars taking place in Rotterdam, Amsterdam, Barcelona, Buenos Aires, Punta del Este and Santiago.



María Carolina Camargo


Tel: +56 2 29400326

María Carolina Camargo has a degree in public accounting from the National University of Colombia with postgraduate studies in economic law and taxation law from the Pontifical Xavierian University. María Carolina has taken transfer pricing courses in International Bureau of Fiscal Documentation (IBFD) in the Netherlands and a course of international taxation at the University of Castilla-La Mancha in Spain. She was professor in transfer pricing at University of Medellin in Colombia.

She has been working in transfer pricing for over nine years, focusing on compliance, strategic planning, consulting in transfer pricing disputes and competent authorities procedures.

María Carolina has rendered services to a wide range of industries over the years that include: energy, pharmaceuticals, consumer goods, IT, and telecommunications.

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