In mid-June, the OECD's Latin America division released a report raising tax issues in the region. Revenue lost to tax compliance is estimated at 6.1% of regional GDP in 2018 alone, with income tax (3.8%) and VAT (2.3%) hit hardest.
Nine countries (Brazil, Chile, Dominican Republic, Ecuador, El Salvador, Guatemala, Panama, Peru and Uruguay) have signed the OECD Convention on Mutual Administrative Assistance in Tax Matters. Six of the eight Latin American jurisdictions reviewed by the OECD in the second round of peer reviews (Brazil, Costa Rica, Dominican Republic, Peru, Chile and Uruguay) were found to be largely compliant with tax information exchange upon request; and nine (Argentina, Colombia, Mexico, Brazil, Chile, Costa Rica, Panama, Uruguay and Peru) are already involved in the automatic exchange of tax information. However, only six countries (Argentina, Brazil, Costa Rica, Paraguay, Peru and Uruguay) have introduced the requirement that beneficiary information be centralized in special registries, Colombia and Ecuador are in the process of approving central registries. Six of the eight Latin American countries that were fully reviewed in the second round of tax information exchange assessments by the end of 2020 had gaps in their legal framework, and only two countries received no recommendations for improvement. Chile, Costa Rica, Panama, Peru and especially Guatemala were rated as in need of improvement, while Brazil and the Dominican Republic were rated as “largely compliant”.
