On November 15 of this year, the SII (Servicio de Impuestos Internos – Internal Revenue Service) published Resolution Ex. SII No. 129, which establishes procedures to assess VAT under Article 20 of D.L. No. 825, Sales and Services Tax Law.
1. Regulatory base for the VAT assessment
According to Article 20 of the Sales and Services Tax Law, the Value Added Tax (VAT) may be assessed in two cases in which the taxpayer’s tax liability cannot be determined due to lack of background information or other circumstances.
First, the taxpayer’s tax liability cannot be determined due to a lack of background information or any other circumstance attributable to the taxpayer. Second, the taxpayer’s tax liability cannot be determined due to an act of God or force majeure, granting the taxpayer, upon request, a period of six months to gather the necessary background information to file the return of the tax periods involved.
2. VAT assessment
The regulation provides that the tax payable in each tax period involved will be assessed, determining the taxable base for taxpayers of the Sales and Services Tax Law, unable to determine the tax liability corresponding to VAT, whether due to lack of background information or any other circumstance attributable to them, considering the rules and reasonable sales margins observed for other VAT taxpayers with similar characteristics.
For these purposes, the activity, business, segment, or locality of the taxpayer to be assessed for the tax period(s) in which the assessment proceeds will be considered similar.
3. Cases with no tax debit or credit background
In those cases with no tax debit or credit background, the main taxpayers with similar movement and characteristics to the taxpayer to be assessed will be identified during the tax period(s) involved, determining an average tax debit and credit. Thus, establishing the amount of VAT payable for each tax period assessed after the corresponding imputation.
4. Requirement of a well-founded resolution
Both the determination of the tax debit and the assessment of the tax payable must be made through a well-founded resolution. Once the amount corresponding to the tax payable is determined, a remittance will be issued for each tax period, describing as a fundament the VAT assessment established in Article 20 of Legislative Decree No. 825.
5. Request for assessment procedure
Those taxpayers who can prove that they are not in a position to determine the tax payable after having been granted 6 months to gather the necessary information to declare the tax periods involved may voluntarily request the SII to apply the assessment and remittance procedure.
For such purposes, they must submit their request through Form 2117, attaching all the background information they have in their possession and are related to the possible determination of their tax debit or credit.