On the 29th of September of this year, one of the most important
and controversial norms of the tax reform: the general
anti-avoidance rule came into effect.
This norm intends to cutback aggressive tax planning providing
new faculties to the Chilean IRS.
Indeed, this norm has incorporated what is widely known as the
"substance over form principle". This is to analyse the
business purpose of a commercial structure instead of only its
legal form.
The new article 4 of the Tax Code has provided that the Chilean
IRS may re-characterize acts and sanction those individuals that
have acted in "abuse" of the law by means of tax planning
structures made only or mainly with no other purpose than reducing
the tax base or tax liability or deferring tax payment through
time. The tax structure may be considered individually or
understood as a whole and will be deemed to be abusive when they do
not produce any relevant business results or economic effects other
than lowering
