Chilean authorities expect to recover more than $1.5 million after ICIJ investigations, according to government data

Chilean authorities expect to recover more than $1.5 billion in unpaid taxes as a result of ICIJ’s investigations, according to data obtained from the country’s tax agency by ICIJ’s media partners CIPER Chile and LaBot.

Data from the Servicio de Impuestos Internos, or SII, covers more than 200 audits initiated following ICIJ investigations, including the Panama Papers, Paradise Papers and Bahamas Leaks. The amount that the Treasury ultimately recovers may change depending on the outcome of court challenges. Audits related to the Pandora Papers are still ongoing.

The bulk of the estimated more than $1.5 billion, nearly 99.9%, is linked to the 2017 Paradise Papers that revealed how corporate giants like Apple, Nike and Uber used the offshore financial system to avoid taxes through imaginative maneuvering of accounting

While the SII data does not cite specific cases, based on a review of separate government records, CIPER and LaBot said the outsized number likely corresponded to a single ongoing case related to a 2022 claim against the mining giant Swiss Glencore, which an audit determined owed. a large amount of unpaid taxes. Glencore has challenged the amount claimed by SII in court.

Glencore was one of a number of multinational companies featured in the Paradise Papers, which CIPER covered in Chile at the time. The investigation, led by the ICIJ in collaboration with 95 media partners, was based on a leak obtained by the German newspaper Süddeutsche Zeitung of 13.4 million documents from offshore law firms and company records in some of the most secret jurisdictions in the world.

The Paradise Papers revealed how Glencore underwent a corporate restructuring that allowed its Chilean subsidiary to make a $534 million “loan” to another part of the Bermuda-registered company, which tax experts warn that CIPER could be a way to hide profits to avoid taxes.

Glencore told CIPER and LaBot it had “a difference of opinion” with the SII regarding the income tax paid in 2019.

“The difference lies primarily in the interpretation of the tax effects arising from the dissolution of a foreign company owned by Glencore, which is unrelated to the allegations of tax evasion by the Internal Revenue Service,” Glencore said.

The SII has opened 216 audits following ICIJ investigations and identified 711 taxpayers and 26 territories linked to the disclosures, CIPER and LaBot reported.

The more than $1.5 billion the Chilean Treasury said it expected to collect as a result of the audits surprised ICIJ members Alberto Arellano and Francisca Skoknic of CIPER and LaBot, respectively. After receiving the SII data from a Freedom of Information request, they filed another pending correction. The second set of data matches the first.

“(Arellano) said, ‘It looks like they’ve lost the comma.’ Because there were too many zeros,” Skoknic told ICIJ. “It was such an impressive number that we thought it was a mistake.”

If raised, the money could hypothetically fund up to five major hospitals, the reporters said. In theory, they estimated, this would add more than 3,000 beds, 110 operating theaters, 30 delivery rooms and five emergency care centers, with helipads, to Chile’s health care network.

Skoknic said the data helped quantify something usually intangible: the social value of investigative journalism.

To put the $1.5 billion figure into context, the ICIJ has calculated that, as of 2021, governments around the world have recovered $1.36 billion from the Panama Papers alone.