On September 6th, 2023, the Chilean Internal Revenue Service (“SII” for its initials in Spanish) issued new criteria regarding the calculation of the refund of VAT previously returned under Art. 27bis of the VAT Law.
Specifically, the SII indicated that income from dividends or capital gains on the purchase and sale of shares or corporate rights should be considered as non-taxed operations for the calculation of the restitution. The predominant criterion was that said income was excluded from the calculation because it corresponded to profits coming, directly or indirectly, from the activity of third parties.
Although the literality of article 27bis of the VAT Law could protect the new SII standard, this new criterion clearly violates the meaning and scope of the VAT refund obligation. This is a formalist, extensive and incorrect interpretation of the norm. However, given the difficulty and risks of challenging the interpretation of the SII, it is preferable for affected taxpayers to take preventive actions.
In particular, we recommend analyzing with your advisors the feasibility of carrying out restructurings to align the ownership of the assets benefited from tax credit refunds of article 27bis with their income subject to VAT, and avoid mixing them with untaxed income, unrelated to the operation of the assets. same assets.
Unfortunately, the SII favored a collection interpretation over a legal interpretation, forcing taxpayers to incur restructuring costs to avoid a false application of the restitution rule.
All taxpayers who have requested VAT refunds for the acquisition of fixed assets (Art. 27bis) or who are planning investments in fixed assets are potentially affected.
The SII established a criterion that is harmful to taxpayers in relation to the calculation of the refund of VAT previously returned for the acquisition of fixed assets (Art. 27bis).
Reorganization that allows the fixed assets that gave rise to VAT refunds of Art. 27 bis to be correctly associated with their income subject to VAT.