![]() ![]() Tel: +56-2 2940 Casals is supervisor at PwC Chile, with more than eight years of experience with the firm. The existence of the aforementioned IRS tools imposes an additional administrative burden, compelling taxpayers, owners and accountants to carefully review and update the contact information before the tax authorities, as well as to take the corresponding steps to ensure the continuing business operation of legal vehicles. ![]() This is a legal presumption that can be rebutted by the affected taxpayer, who can also file a tax claim according to the general rules. When using this tool, the IRS does not perform a tax assessment because there are no net tax differences or tax liabilities. No tax liabilities (apart from tax penalties). No net tax differences, although there are registered profits or assets, and The 2016 Tax Reform Amendment Act allows the IRS to, in special situations, automatically declare the termination of business without summoning, regarding taxpayers with no business operations for at least 36 tax periods and as long as there are: Termination of business by declaration (effective from August 1 2016) It is important to mention that this special summons extends in one year the statute of limitation for tax audits and collections (and not in three months as the general rule), for both the taxpayer and his final owners. Should such notice is not given by the taxpayer, and provided that there is no rebuttal of the antecedents considered by the IRS, the authority will declare the termination of business activities, and will proceed to perform an official tax assessment. The summons shall request the taxpayer's response by a certain date, indicate the legal and factual grounds to determine that the taxpayer has ceased in his activities, and include a pro forma tax assessment, if applicable.īefore the reply due date, the taxpayer can opt to give a voluntary notice of termination of business by submitting all the information required for this purpose, and declare and pay the corresponding income tax. Therefore, if the taxpayer does not submit yearly tax returns during two consecutive years, but does fulfill monthly declarations, the tax regulator could not conclude that the taxpayer has terminated its business. Submission of a monthly or yearly tax return which does not include any income, either taxable, not taxable or exempted, for the same periods referred above, respectively Īdditionally, the IRS shall confirm the absence of any other evidence of performance of business activities, prior to summon the taxpayer. No submission of yearly tax returns for two consecutive years ![]() No submission of monthly tax forms during eighteen consecutive months (for taxes to be declared under a monthly basis), In particular, our law provides for situations to be taken into account by the IRS to declare the termination, such as: This allows the IRS to declare the termination of business in case of summoned taxpayers that, without giving a formal termination of commercial activities as required by law, have ceased to operate at a certain date according to the information gathered by the authority. Termination of business after summoning (effective from September 30 2015) ![]()
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