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Chile: Discovery in Chile


Gonzalo Schmidt Gabler

Felipe Dominguez Celis

The Chilean tax dispute resolution system has always separated the administrative procedure from the judicial procedure; therefore, the taxpayer could design its strategy by deciding when to present its evidence, before the administrative authority or the Tax Tribunal (held by the tax authority), or in both. However, this double instance to produce evidence has suffered an important limitation in the tax dispute process, since on January 27 2009, Act N° 20.322 came into force, which "strengthens and perfects the tax and customs jurisdiction", being one of the most important reforms to the tax justice system administration in Chile.

This important tax reform brought significant changes to the tax law enforcement, most notably the creation of independent tax courts to decide upon tax litigation matters. Along with the creation of these new Tax Tribunals, this reform also incorporated new procedural institutions which intend to bring juridical certainty to the tax dispute resolution procedure.

One of the most relevant institutions is the Discovery, which is regulated under section 132 of the Chilean Tax Code.

This institution was adapted locally to fit our tax procedural system, to ensure the "good faith" of the taxpayer when litigating in tax disputes.

As mentioned, this new regulation for producing evidence in a tax trial provides that evidence that has a direct relation with the operations under audit shall not be admissible when such information was previously requested by the administrative authority, in a determined and specific manner, at the moment of the citación or citation (main audit mechanism used by the Chilean Tax Administration), and the taxpayer did not hand it over to the Tax Administration, despite having such documentation available at such moment.

Notwithstanding the short time this new tax justice has been in force (a little more than three years), this institution has been frequently used by the Tax Administration to defend its position before the new tax tribunals, with uneven results, and not without critics.

Basically, the attorneys representing the taxpayers have criticised that this new institution threatens the right to a legitimate defence, the due process and the right to determine the defence strategy of the taxpayer. Additionally, questions arise regarding the possibility of and administrative requirement that does not have any previous judicial control, to impose very significant limitations to produce evidence in the judicial phase, which may affect the result of the process.

Other questions refer to the sufficiency and specificity of the administrative act in which evidence is requested by the tax authority for it to impeach in the tax trial any evidence that was not presented at the administrative stage.

Notwithstanding the above, the taxpayer shall always be able to defend itself arguing in the trial that evidence was not presented in the administrative stage for causes that are not imputable to it.

Despite all the questions and doubts generated by this new institution, the immediate effect of the Discovery is that taxpayers and its counselors shall have to pay special attention to the administrative audit stage of the process, as they were used to deal with this administrative procedure without taking into consideration the legal consequences of this phase in the judicial stage, as they were independent procedures.

In consequence, today a taxpayer that does not have the proper counsel in the administrative strategy could find itself unable to render evidence in the judicial stage to prove its arguments.

Gonzalo Schmidt Gabler ( and Felipe Dominguez Celis (


Tel: +56 2 29400152


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