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The focus of many of the articles in this guide on issues tied to the multilateral efforts to counter tax base erosion and profit shifting (BEPS) shows that taxpayers across Latin America are keeping a close watch on global developments.

Many of the countries in the region are not OECD members, but the level of Latin American awareness and engagement is testament to the potential impact the project will have on international tax rules.

But taxpayers are also having to contend with the effects of domestic reform packages implemented throughout the region in the past two or three years. As new and updated national measures continue to settle in, taxpayers and advisers are ensuring they keep pace by continuing to tweak their compliance systems and operational processes. This is particularly relevant in Chile and Mexico, given the volume and significance of changes which were made to the tax codes of these two countries during 2014.

It is also evident in Brazil, where legislative updates are handed down on a weekly, if not daily, basis. Such frequent changes contribute to an insecure environment since authorities and auditors do not always respect legal provisions in the same way that authorities in other countries do.

The most concerning recent example of this is July's provisional measure 685, which shows the authorities' willingness to shift the compliance burden further onto taxpayers, by requiring them to disclose to the authorities any transaction or tax planning structure where the business motive is "unclear". This is somewhat ironic, given how unclear and ambiguous some of the measure's terminology is (for example, references to "transactions that were structured in an unusual manner"). Taxpayers and advisers did not welcome the measure, and a question remains over its conformity with the law.

Other issues dominating taxpayer time and resources centre on technology challenges and the volume of declarations required. Add to this high tax rates and it is clear the outlook is less than rosy for taxpayers in Brazil and beyond. And with the Brazilian economy struggling, coupled with high levels of public debt, rate-raising, as well as base-broadening and the creation of new taxes, is set to continue into 2016.

In this context, International Tax Review brings you the 12th edition of its Latin America regional guide, published in association with Baker & McKenzie, Chevez Ruiz Zamarripa y Cia, Deloitte, EY and PwC.

Matthew Gilleard
International Tax Review

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