This has led the authority to develop a new audit programme.

“The chief was not more specific about the abusive behaviours,” said Roberto Carlos Rivas, a partner at PricewaterhouseCoopers in Santiago, Chile.

Escobar also has not divulged any details on the new audit programme.

The SII claims to have identified problems with the tax contributions of multinational companies in Chile.

“We understand the IRS chief is referring to detection of differences on how inter-company transactions are been valued,” said Rivas. “This directly influences the taxable base determination and the amount of income tax to be paid.”

Escobar has stated that the most significant differences are in the pharmaceutical, chemical, forest and reinsurance industries, meaning these industries are most likely to see increased scrutiny.

The SII expects that the transfer pricing audit program will lead to disputes and new litigious actions in the near future, this comes as no surprise as Chile is renowned for the amount of litigation that takes place.

The statute of limitations is three years in Chile, but it can be extended to six years under certain circumstances.

Escobar has said that the SII will initially review the last three years, starting on fiscal year 2006. However, the SII could go back up to 6 fiscal years if there is any penal issue with regards to the taxpayer.