For a criminal tax fraud offence to be punished, it must be expressly stated and duly described in the law.
As a general rule, fraud tax offences are described in article 97 of the Chilean Tax Code, which contains a broad catalogue of tax criminal conducts, such as the use of fake invoices for reducing expenses or for obtaining tax refunds, informal commerce, use of malicious procedures for reducing the tax burden, etc.
Criminal proceedings for tax fraud do not depend on tax adjustment, but on gathering the facts set forth in the law, one of which may be a fiscal detriment.
Criminal proceedings for tax fraud do not depend on the application of tax penalties, but on gathering the facts set forth in the law. A criminal proceeding may conclude with the application of a tax penalty.
Yes, criminal intention is a requirement for configuring a criminal offence.
Amendment of a tax return and full payment of applicable tax may mitigate the criminal liability but does not prevent the tax authority to initiate a criminal proceeding.
For a tax fraud to be prosecuted, the Chilean Tax Code requires a legal action from the tax authority. Once this legal action is exercised, the Chilean prosecutor is able to pursue the tax fraud offence.
Statute of limitation depends on the nature of the criminal offence, which is associated to the sanction stated for each criminal conduct. In this sense, statute of limitation in the case of crimes is a 10 year term, and in the case of simple crimes is a five year term.
Statute of limitation starts from the date of commission of the crime (e.g., when the taxpayer files the tax return).
Sentence associated to tax crimes are normally imprisonment ranging from 61 days to 15 years, depending on the nature of the criminal offence and the penalty associated thereto. These sentences are applied with criminal fines which vary depending on the entity of the crime (e.g., 50% to 300% of the tax evaded).
Criminal liability only falls on the individual who committed the tax fraud or who has been involved in that commission. Therefore, having a compliance or risk mitigation program does not mitigate criminal liability by itself, but my serve for the Company to opportunely detect cases of tax fraud.
No, there is no a self-disclosure program in Chile. Self-disclosure may mitigate the criminal liability if it is deemed as a cause of collaboration with the tax / judicial authority.
Full payment of a tax assessment is not an exemption but it may mitigate the criminal liability.
Yes, the statute of limitation is suspended once the tax offence is prosecuted.
Yes, collection of underpaid or unpaid taxes is always possible even in parallel with a criminal prosecution.
Yes, there are alternative settlements in the context of the criminal procedure.
Only individuals, as companies cannot commit tax fraud offences, subject to criminal sanctions. However, companies may be subject to fines imposed by the Tax Court.
Yes, provided the employees / directors committed a tax fraud offence or have been involved in the commission of a tax fraud.
Criminal liability only falls on the individual who committed the tax fraud or who has been involved in that commission. Therefore, the company is not liable for the amounts claimed to such individual but may be liable for tax deficiencies derived from the commitment of the tax fraud.
As of the assumption of the new government in 2022 (and the arrival of a new tax authority administration) the IRS has defined the criminal prosecution as one of its main actions for combating tax fraud. Therefore, criminal cases may be increased considerably in the next months, as part of this strategy.