In accordance with the recent official letter N°2002 of August 4, 2021, regarding the “Format to keep supporting documentation from the rendering of workers’ expenses”, the Chilean Internal Revenue Services (IRS) ratifies its response to inquiries made by taxpayers in this matter, based on a change in criteria occurred since the end of 2019.
According to Article 31 of the Income Tax Law (LIR), for an expense to be accepted for tax purpose it must meet several requirements, one of which is that it be reliably accredited or justified before the IRS. Before the official letter 2917 of November 29, 2019, in accordance with article 17 of the Tax Code, it was instructed that, among other requirements, the information should be supported by the original document, for example, tickets, invoices, payment vouchers (thermal paper) and other similar. However, the continuous digitization process promoted by the IRS, in addition to the loss of integrity suffered by physical papers over time, caused a change in the requirement of the IRS to support the aforementioned documents.
Thus, in the case of the rendering of minor expenses, and even in the accreditation of carryover losses, the IRS has declared itself in favor of supporting said expenses by means of photograph or electronic means and has indicated in the aforementioned official letter Nº2917 of 2019, Nº1645 of 2020, Nº678 of 2021 among others, changing the previous criteria.
Notwithstanding the foregoing, although the criterion has been ratified in more than one taxpayer consultation, it is understood that there is no express statement from the IRS that supports what is indicated in the offices. For example, circular 53 of 2020, which refers to the modifications introduced to article 21 and 31 of the LIR by Law N°21,210 of 2020, explains the general requirements of the expenses of the article 31 of the LIR and in particular, refers to the fact that they must be accredited before the IRS. However, it does not mention the documents accepted in digital form as reliable support or instructions for the original documentation.
Therefore, it should be understood that in this specific point, attending various responses from the IRS to taxpayers inquiries, the expenses carried out by the workers and the company, can be supported by documentation in digital format, so that the files of images of the vouchers are valid as a complementary support for the accounting and other mandatory records that the taxpayer must keep; only when constituting a faithful and complete reflection of the original paper document. The foregoing, considering that the tax authority will apply a case-by-case review that will define with certainty the criteria.