What is the Internal Revenue Service?

The Internal Revenue Service is the state agency in charge of the collection, inspection and tax administration of the country's internal taxes. Consequently, it is up to him to maintain the alert of commercial activities for the promotion of the economy and the resources that the State uses to finance government plans and social and economic investments, for the benefit of the community.

This entity, which is currently dependent on the Ministry of Finance, owes its origins to Law No. 1,515. This was enacted in January 1902 by President German Riesco, establishing a tax on alcohol production and providing for the creation of a public service that would be in charge of overseeing the new tax: the Alcohol Tax Administration. .

Subsequently, new taxes were added to its control and administration, such as: the tax on tobacco and decks. Therefore, what expanded its powers and declined in that, during 1912, its name will change to the General Directorate of Taxes; in 1916, to the General Directorate of Internal Taxes; and in the mid-1960s, to the Internal Revenue Service.

Currently, the SII is made up of a National Directorate, which has its headquarters in Santiago de Chile, - and 16 Regional Directorates throughout the country. This allows, according to data from the same organization, to have enough officials to work in and 68 all the offices scattered throughout the national territory.

Each SII Directorate covers a specific territory. For example, in the Metropolitan Region there are addresses for the south, north, east and west sectors, among others.

What is the work of the Internal Revenue Service?

The work of the Internal Revenue Service is fundamental within the country's organizations, since it is of great importance at the level of the General Treasury and the Comptroller General of the Republic.

However, in accordance with the Organic Law of the Internal Revenue Service, this body has the obligation to apply and supervise all internal taxes established or to be established, and whose control is not specially entrusted to a different authority.

In more specific terms, the SII has the function of:

• Administratively interpret the tax law and establish complementary regulations for its correct application.
• Give instructions and dictate orders to ensure the application of taxes.
• Inform taxpayers about the fate of taxes and the penalties to which they are exposed for non-compliance with their tax obligations.
• Represent the Treasury in the application and collection of taxes.
• Assume the defense of the Treasury before the Courts of Justice, in trials regarding the application and interpretation of tax laws.
• Advise the Ministry of Finance on tax matters.
• Resolve administrative claims related to the application of taxes

It also has judicial powers. It is the state entity in charge of exercising criminal action for tax crimes, as well as hearing and ruling as a court of first instance in tax claims filed by taxpayers.

The pillars on which it operates are:

• Contribution to economic development: by optimizing the administration of the Treasury, it seeks to improve productivity, reduce unfair competition and provide the state with economic resources.
• Facilitation of tax compliance: the objective at this point is to maximize voluntary compliance with tax obligations.
• Strengthening of audit control: in this regard, it seeks to minimize non-compliance, evasion and tax fraud.

In short, the Internal Revenue Service contributes to the nation's economy and provides taxpayers with services that facilitate voluntary tax compliance, without prejudice to the legal provisions it may take against evaders.

What is the relationship of the SII with First and Second category taxpayers?

Basically, the Internal Revenue Service has set up a series of offices throughout the country, empowered to deal with claims and queries from taxpayers, whether they are first or second category.

Although, more effective in this regard, is its official website, where you can find all the information related to the publication and application of tax regulations, as well as a significant volume of educational content on provisions that require training, such as electronic invoicing or the new Tax reform.

In turn, this platform is quite dynamic and allows users to carry out a large part of their tax obligations online, such as filing and paying VAT.

It is worth noting that the Internal Revenue Service has been adapting its way of working and supervising smaller companies, which is reflected in tax relief and a much more simplified income tax system.

Regarding the Examination, the SII has a protocol of tasks whose purpose is to urge taxpayers to timely comply with their tax obligations. Among these stand out:

• The tax audit, which consists of verifying the accuracy of the declarations by reviewing the background and documentation of the taxpayers.
• On-site inspection of the activities and records of the taxpayers, in order to distort or confirm the assessments regarding the correct level of taxes that each taxpayer must pay.