December 2, 2019

Measures announced to facilitate SME tax compliance

Measures announced to facilitate SME tax compliance
Today, in light of the complex situation in the country, Finance Minister Ignacio Briones announced measures to facilitate tax compliance by SMEs.

Today, in light of the complex situation in the country, Finance Minister Ignacio Briones announced measures to facilitate tax compliance by SMEs.

“Behind every SME, there are people who are suffering and having a bad time. As authorities and the Finance Ministry, our obligation is to do everything in our power to help alleviate the pain, damage and economic difficulties these companies are suffering,” said Minister Briones, accompanied by Fernando Barraza, Director of the National Tax Service (SII).

The measures are as follows:

1) Postponement of the presentation of VAT returns by individuals and MSMEs, without additional charges, until November 10. “The first postponement announced on October 20, which expired on October 31, has been extended. This initiative seeks to benefit 144,000 taxpayers who will have the margin and greater liquidity to address this difficult moment,” explained Minister Briones.

Companies with a turnover of less than 100,000 unidades de fomento (UF) are eligible for this benefit.

2) The second announcement made by Minister Briones aims to help companies that have been affected by inventory losses. “Specifically, we will make special facilities available for those companies that have suffered merchandise losses. The objective is that, given the damage to their property, they can incorporate the loss more simply in their tax declarations,” he said.

This procedure will avoid the levy of VAT on lost inventory.

In addition, as an administrative measure to facilitate this process, SMEs will have until 31 March 2020 to report this situation to the SII.

3) The third measure, related to property tax, seeks to address the damage that different companies have suffered to their premises. “They will have facilities to inform the SII more easily about damage to their installations. To this end, SMEs will be able to request a review of the property’s assessed value in order to reduce the corresponding taxes,” explained Minister Briones.

4) The fourth measure involves the creation of a special system for notifying the SII about the loss of relevant accounting records as a result of the damage companies have suffered. “We are establishing facilities to report and proceed with the reconstruction of this documentation, thereby avoiding the levy of fines and the application of sanctions,” said Briones, who added that businesses will have until 31 March 2020 to report this situation to the SII.

“We face an exceptional situation, known to all, that is generating problems in small companies and having an impact on their sales. This involves people, business owners and entrepreneurs who are experiencing significant economic difficulties. Last week, VAT invoicing decreased by 25%. This is an important drop that gives us an indication of the difficulties these companies may be facing, so we want to support SMEs with measures of this type,” said Minister Briones.

Administrative measures

The Director of the SII, Fernando Barraza, announced complementary administrative measures such as giving priority to authorizing requests for VAT refunds by taxpayers with change of subject, which will provide access to cash flow within a maximum of five days.

The SII will also waive the additional charges that normally apply for the late submission of common requests and procedures such as registering the start of activities, updating or modifying tax information and closing a business. This measure seeks to support all taxpayers who have been unable to comply with these obligations because of the situation in the country.

The deadline for the compulsory use of electronic export invoices has also been postponed until 17 January 2020, allowing companies to continue to use their current system until that date.

Given the exceptional situation in the country, the SII has extraordinarily authorized taxpayers with a low risk of default and pending situations to issue electronic invoices. This will free them of the need to visit an SII office immediately and, meanwhile, continue invoicing and keep the business in operation.

In addition, all citations to SII offices will be automatically rescheduled. Taxpayers who have been unable to comply during this period will be contacted to inform them of a new date, without being registered as having failed to appear.

Source: Ministry of Finance of Chile Investor Relations Office