On 12th May the Internal Revenue Service published the details of its Tax Compliance Management Plan (TSPM) 2016, which considers the tax control actions which the entity is applying this year, in order to reduce tax evasion and avoidance.

The tax authority said they have gradually been implementing a model that studies the different segments that make up the tax system (economic, regions, types of taxpayers, behavior). To encourage tax compliance, it has set actions ranging from assisting taxpayers to filing legal action if the taxpayer incurs malicious or fraudulent conducts by avoiding paying taxes.

In this context, the version 2016 of the TSPM considers the powers granted by Law No. 20,780 of 2014 on Tax Reform, amending various provisions of the tax system, and No. 20,899 of 2016 Law, which introduced simplifications to the SII and accuracies particularly in matters of cooperation and encouragement of tax compliance that will be effective from this year.

The plan outlines actions and its type, strategies to be developed, taxpayers and interest segments considered, to-face actions, audits and remote controls; the development of computer systems to facilitate, assist and encourage taxpayer compliance and achieve greater traceability of treatments applied, and other operational considerations.

These actions designed have been framed in 6 general strategies in the area of tax compliance:

a) Comprehensive Strategy on VAT: are considered the sub VAT return, control of emission of electronic tax documents, purchases control at supermarkets and similar shops.

b) Comprehensive Income Strategy: in which will emphasize the historical FUT control, control fees receipts and invoices and strategies exempt on income arising from financial instruments.

c) Strategy for international control: will work on the control of international trade (exporters / importers) of taxpayers with operations abroad and will analyze and define actions for taxpayers with related companies abroad.

d) Strategy for aggressive behavior: because of the new powers of the Service, actions will be developed to combat aggressive tax planning and avoidance.

e) Strategy for specific segments: actions on certain economic groups, high net worth individuals will be addressed and it will control, among others, the correct determination of the Tax on Inheritance and Donations.

f) Regional strategies: the Regional Offices define and implement actions on segments of local relevance.

The Management Plan of Tax Compliance 2016 must be understood in the context of an ongoing effort to improve levels of tax behavior of taxpayers, which represents the continuity of PGCT 2015 and the basis for the projection of the topics to be included in 2017.

SII is committed to develop its activities with the highest technical standards of treatment and transparency in the act of its officers and estimated time work, with due consideration of the rights of taxpayers, who always have the right to represent concerns or differences through voluntary or existing legal mechanisms.