I Was Notified of an SII Tax Assessment: Deadlines and Options.

A tax assessment (liquidación, Article 24 of the Tax Code) is the act through which the SII determines tax differences; it states the amount of tax owed, the adjustments and interest for late payment, and penalties where applicable. Unlike a notice under Article 63, at this stage there is already a concrete claim for payment. The deadlines that begin to run here are strict and cannot be extended.

The Two Paths, and Their Deadlines

Voluntary administrative appeal (RAV, Article 123 bis). It is filed with the SII itself within 30 administrative business days, and it is decided by the Regional Director or an official acting under delegated authority. Filing it suspends the deadline to file a judicial claim under Article 124 of the Tax Code. The SII has 90 days to rule; if it does not, the appeal is deemed rejected, and the deadline to file a judicial claim resumes running. During the appeal, the taxpayer may be granted a hearing to assert their rights and submit whatever records are needed to resolve the request. It is strongly advisable to attend with professional advice from a tax specialist, to make the most of this option. The outcome of this appeal can lead to relief from penalties and interest under Article 207 of the Tax Code.

Claim before the Tax and Customs Court. The general deadline is 90 business days from notice of the assessment (Article 124). If the taxpayer pays the determined amount within that period, the deadline is extended to one year: to do so, an early tax bill is requested (Article 24). That rule, not widely known, stops interest from growing without giving up the right to dispute the merits. Legal representation is mandatory (Article 129), except in claims involving amounts under 32 UTM (a Chilean monthly tax unit), where a taxpayer may appear without an attorney, though it remains strongly advisable to appear represented by an experienced tax attorney, given how technical the procedure is and the tax consequences that can follow if the claim is rejected.

The Tax and Customs Court, upon request (Article 147 of the Tax Code), may order the total or partial suspension of the judicial collection of a tax bill, for a set period or until a first-instance ruling is issued. If the first-instance ruling rejects the claim in whole or in part, an appeal may be filed, and the Court of Appeals hearing that appeal may, upon request and after a report from the Treasury, suspend collection in whole or in part for a set period; the Supreme Court may do the same when hearing a cassation appeal.

How the Amounts Grow

The assessed differences accrue daily default interest, calculated on the readjusted principal, at a rate equal to the standard interest rate applicable to peso-denominated, inflation-adjusted operations of one year or more, up to the equivalent of 2,000 Unidades de Fomento (UF), as published by Chile's Financial Market Commission (CMF), plus 3.5 points. Payments can be made even before a tax bill has been issued (Article 147), which stops interest from accruing on the amount paid.

What to Weigh Before Deciding

• The strength of the merits: which part of the assessment is defensible and which is not. Assessments are rarely all-or-nothing.
• The cost-risk balance: the amount assessed, projected interest, the cost of litigation, and the odds of success item by item.
• Whether it makes sense to pay in order to extend the deadline to one year and argue the case without time pressure.
• The administrative path first: a well-built RAV appeal can resolve entire line items without going to court.

Negotiating Is Also an Option, Even Inside the Lawsuit

Many taxpayers assume that once the claim has been filed, the only path left is to wait for the ruling. That is not the case. The Tax Code provides two self-composition mechanisms that can end the dispute, in whole or in part, without the process having to run its full course: conciliation (Article 132 bis) and out-of-court settlement (avenimiento extrajudicial, Article 132 ter). Used well, they are among the most underrated tools in tax litigation.

Conciliation

The Tax and Customs Court may call the parties to a conciliation hearing at any stage of the proceedings, either on its own initiative or at a party's request. It is common for the taxpayer to request it once the pleadings are closed and the evidence has been presented, once there is real clarity about the strength of each item.

What can be settled. The law is broad: conciliation can cover whether the elements of the taxable event are present, the amount of taxes, adjustments, interest, or penalties, the legal characterization of the facts in light of the evidence presented, the weight given to that evidence, and the existence of manifest legal, procedural, or substantive defects or errors.

What cannot be settled. This is what causes the most confusion in practice, and it is worth being clear on it before sitting down to negotiate: conciliation cannot consist of a plain reduction of the amount owed for its own sake. It is only available when that reduction is grounded in factual or legal errors in how the tax was determined, in evidence showing that the elements of the taxable event are not present, or when the assessed amount is shown to be excessive in light of the evidence presented at the hearing.

If conciliation is rejected, the lawsuit simply continues: the court calls the parties to hear the ruling and has sixty days to decide. There is no penalty or adverse effect for having attempted conciliation and not reaching an agreement, although it is reasonable to avoid disclosing at the hearing any arguments or records one would rather not see reflected later in the case file.

Out-of-Court Settlement (Article 132 ter)

This is the parallel path available when there is no conciliation hearing underway, but a lawsuit is already pending. The claimant may, on a one-time basis, approach the SII's Director directly to propose the terms of a settlement, subject to the same rules and limits as conciliation. A practically important point: there is no need to withdraw the claim to attempt this, so there is no risk of losing the judicial path while negotiating.

Once the proposal is received, the SII's Executive Committee has forty days to decide, in whole or in part, stating the factual and legal grounds for its decision. If it does not rule within that period, the settlement is deemed rejected. If it is approved, a record is drawn up and signed by both parties, which must then be authorized by the court hearing the case.

What Not to Do

• Letting the 90 days go by. Once the deadline passes, the assessment becomes final and moves on to a tax bill and collection.
• Filing a hastily prepared RAV appeal: its arguments and records remain in the file, and can eventually work against the taxpayer in a later judicial claim.
• Filing the RAV appeal and then not following up on it: once the 90-day period runs, it will be deemed rejected, and it is the taxpayer's own responsibility to keep it moving.
• Paying the full assessed amount without a prior evaluation, which amounts to giving up in advance on an analysis of items and amounts that could be reduced, partially or in full.

Frequently asked questions

Can I file the RAV appeal and still file a claim afterward?

Yes. Filing the RAV appeal suspends the deadline to file a judicial claim, which resumes running if the outcome is unsatisfactory or if the appeal is rejected by default.

Does filing a claim stop collection?

There are two situations, and they don't work the same way. For taxes not yet billed: the rule is automatic, with no need to request it, while the claim is pending, the disputed portion of the assessment is not billed. The SII will only issue the tax bill, once the ruling has been notified, for the portion of the claim that was rejected (Article 24). The undisputed portion of the assessment, on the other hand, is billed immediately regardless. For taxes already billed before the claim was filed: suspension is not automatic here, the Tax and Customs Court may order the total or partial suspension of judicial collection, for a set period or until the first-instance ruling (Article 147, third paragraph), but in practice this requires the taxpayer to request it expressly within the lawsuit, submitting the records that justify the measure. The court does not suspend collection on its own simply because a claim is pending.

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