How to appeal a Chilean IRS resolution

A resolution is a formal administrative act through which the Chilean Internal Revenue Service (SII, for its initials in Spanish) decides on a specific matter. For example, it may authorize an activity, impose a sanction, establish procedures, delegate powers, resolve requests, or formally create special regimes. In some cases, a resolution is issued following a citation or review process and may establish tax differences or adjustments regarding what the taxpayer originally reported.

Unlike a liquidation or a tax collection notice, a resolution does not always imply the existence of tax liability.

The SII may issue resolutions to:

• Approve requests.
• Reject tax refund claims.
• Deny administrative petitions.
• Resolve specific procedures.
• Authorize or deny particular actions.

These decisions are formalized through specific administrative acts, including tax liquidation, tax collection notices, and administrative resolutions, each of which is subject to its own appeal procedures and deadlines.

Tax liquidation

Tax liquidation is the principal act disputed following a tax audit and a citation, it´s the document through which the SII informs the taxpayer that there is a difference between the taxes reported and the taxes that, in SII’s view, should have been declared.

When a liquidation is issued, taxpayers should verify whether the SII considered all the information and documentation previously submitted, review the calculations performed by the tax authority, and identify any potential errors in the interpretation of the law. It is also recommended to gather all supporting documentation, including the original citation (if any), the response submitted to the SII, invoices, receipts, contracts, bank statements, and any other records supporting the taxpayer’s position.

Warning signs

• Significant VAT adjustments affecting the company or multiple tax periods.
• Dismissed expenses.
• Income tax differences.
• Transactions involving related parties.
• The use of tax credits.

In these situations, obtaining specialized advice is generally recommended. If the taxpayer does not challenge the citation in a timely manner through the mechanisms provided by law, such as a Voluntary Administrative Reconsideration Request (RAV, as its initials in Spanish) or a petition submitted to the Tax and Customs Court, or lacks sufficient supporting evidence to substantiate its position, the SII may confirm the proposed adjustments and proceed to the subsequent stages of the process, including the issuance of a tax collection notice and the collection of the corresponding taxes.

Next steps

If the tax liquidation is upheld, the SII may issue the corresponding tax collection notice, through which it formally demands payment of the taxes it considers due, with any applicable inflation adjustments, interest, and penalties.

If the taxpayer does not file a claim within the statutory deadline, or if the claim is ultimately rejected, the collection process may continue in accordance with the general rules set out in the Chilean Tax Code.

Administrative resolutions

Administrative resolutions are decisions issued by the SII that do not necessarily determine tax liability. They may be related to requests submitted by taxpayers, tax refunds, tax benefits, administrative registrations, special petitions, and specific audit procedures.

These are formal decisions through which the SII may approve or reject requests made by taxpayers, such as applications for tax refunds, tax benefits, or the waiver of penalties and interest.

The most common administrative resolutions involve the rejection of:

• Tax refund requests.
• Requests for the waiver of penalties and interest.
• Other administrative applications submitted by taxpayers.

Deadlines

Article 124 of the Chilean Tax Code provides that liquidations, tax collection notices, and certain resolutions may be challenged within a general period of 90 days from the date of notification.

If the resolution results in additional taxes being reviewed or affects how those taxes are calculated, it may be appealed before the Tax and Customs Courts.

For further information or assistance regarding this matter, please contact Unitax team.