Chile Moves Towards OECD Membership And International Standards

by Mike Godfrey, Tax-News.com, Washington

10 July 2009

Chilean finance minister, Andrés Velasco, looks to pass legislation for Chile to become an OECD member and regards the four bills envisaged as doubly beneficial, as they will enable Chile both to meet international standards and promote modernization of the internal economy.

The Minister and a parliamentary delegation have held meetings at the OECD headquarters in Paris to discuss Chile’s current progress. The OECD has recommended certain reforms which would support Chile’s membership which include exchange of tax information, responsibility of legal entities in cases of bribery, and other public and private corporate governance matters. Velasco said that these were not being introduced just for the benefit of the OECD, but rather because they represent best practice and good economic policy.

The Minister said 'it is a very strong signal' that two delegations of Chilean parliamentarians have visited the OECD in less than one month, alluding to President Bachelet's visit in late May and meetings held with Senators Evelyn Mathei and Camilo Escalona and other Deputies. 'This shows that all political factions consider this process to be highly important. We all understand that we are facing a unique political opportunity, because the world’s major economic blocs are inviting us to become a part of this club of successful nations, and, if we make swift progress, we could become OECD members during the current administration,” he said.

Some apprehension has been expressed on the bill to allow exchange of tax information. On this the Minister of Finance said that Chilean tax authorities already share some information; this initiative basically broadens access. 'The change with respect to current laws will be minimal,' said the minister, and added that the idea was for Chile's Internal Revenue Service (SII) to access data when there is an investigation of a presumed tax irregularity, or other routine inspection.

Velasco said that the confidentiality of the information is always safeguarded, and abuse subject to criminal penalties. When access to current account data is requested, the party in question is informed and can oppose it through the courts. "For decades, the SII has had information about taxpayers that enables it to generate a tax demand. This information has never been used for other purposes. We have a long history of very good performance in keeping this information safe", he said.

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