1. The taxpayer is an individual entrepreneur who develops the line of investment and capital income and business advice, for which she pays the First Category Tax and declares her effective income based on complete accounting. 2. On April 1, 2008, the taxpayer contributed to a company that we will call “A”, shares and social rights of companies in which it had an interest, which for these purposes we will call “B”, “C”, “D”, ” E ”and“ F ”, for a total of $ 7,057,969,004, at the tax value recorded in the accounting of the individual businesswoman. 3.- As a result of the aforementioned contribution, the taxpayer began to have direct participation in A, and this, in turn, as a result of the aforementioned contribution, acquired participation in the 5 companies mentioned above. 4.- Likewise, it was proven that said contribution was not intended to carry out the remittance of the recipient company, nor was it made with a view to distributing the benefits arising from it among the partners. 5.- The taxpayer did not prove that she was in an imminent state or of eventual impossibility to manage her assets invoked to explain the contribution of shares and social rights alluded to, nor that such operation served the interests of the individual company, dealing rather with matters personal of a family nature. 6.- The operation carried out resulted in the exclusivity of rights in company A by the taxpayer, which became 99.9%.

Does the contribution that the taxpayer made to company A respond to a process of reorganization of business groups that obeys a legitimate business reason? The court of first instance considered that the contribution made by the taxpayer was not due to a legitimate business reason, analyzing for this purpose the reasons given by the taxpayer, noting that the existence of debts of the individual businesswoman was not demonstrated to justify the aforementioned allegation. for the purpose of joining a regime that would limit its liability to its creditors; and discarding the reference to the interest of incorporating their descendants into the administration of the company in a more expeditious manner than that resulting from processes of opening of succession or interdictions, in view of the fact that the contribution occurred in April 2008 and in July 2010 the Taxpayer continued to represent their interests, so the action was intended to anticipate uncertain issues that did not occur.

The appeal was rejected in the fund deducted by the taxpayer, while the minority vote was about to accept it and annul the contested ruling. The majority vote stated, in the main, that the challenge sustained by the taxpayer that was based on the erroneous conception expressed by the Internal Revenue Service and the judgment of the fund regarding what should be understood for legitimate business reasons, failed to consider that those circumstances that were invoked by his part included within such term were not considered to be proven. Under these conditions, the thesis upheld by the taxpayer could not succeed as the factual verification of the reasons on which she relied was discarded. Minority vote 3 ° That, since the legislator has not defined the concept of “legitimate business reason”, it is necessary to resort to the general and particular rules of interpretation, in order to specify, for the purposes of jurisdiction, its real meaning and scope that, as agreed in this process, is not clear. In the appellant’s opinion, “legitimate business reason” is any purpose other than avoiding the payment of taxes; In other words, this last purpose is incompatible with the legitimate reason required, the legitimacy lies only in the exclusion of any evasive effect linked to the operation. In this logic, the absence of an evasive purpose equals the legitimate business reason and the existence of this purpose – obviously proven – equals the illegitimate business reason. 4 ° That the administration seems to accept the criteria set forth when, through circulars Nº 68 of 1996 and Nº 45 of 2001, it opposes “legitimate business reason” to an elusive mechanism of tax obligations: “when there is a legitimate business reason that justifies it. (the reorganization) and not a way to avoid paying taxes. ” So, the justification must consist of a business – in a “way” – which, because it is not aimed at avoiding paying taxes, is a legitimate reason. This last word, in its meaning relevant to what is of interest in the species, means “motive” or “cause”. Business reorganization has a legitimate reason when its motive or cause is not to avoid paying taxes. The authors believe that “it should be borne in mind that for it to be a business reorganization, there must be a legitimate business reason and not a way to avoid paying taxes”. (Aste, Course on Tax Law, T.I. Sixth Updated Edition, Thomson Reuters, p.552). In turn, Vergara Wistuba, when analyzing the requirements of article 64 of the Tax Code, alludes to a legitimate business reason such as one that is not done with the sole purpose of avoiding the SII’s appraisal power (Tax Law Manual, TI Librotecnia , p.148) At pages 91, on page 15 of her brief, the respondent points out that the legitimate business reason cannot consist of looking for a way to avoid paying taxes. Therefore, what makes the designed “form” illicit or illegitimate, the organized business, is only the defrauding purpose of tax interests and no other. 5th That the appeal ruling, invoked in the character of jurisprudence on the matter, defines the “legitimate business reason” as “planning that has a commercial or economic purpose other than the sole objective of avoiding a tax” (SCA Arica, 06 June 2012, Case No. 3-2012). In the judgment handed down by the Santiago Court of Appeals on July 22, 2014 (Rol 7682-2013) it is argued that the concept “legitimate business reason”, which is developed in the law regarding the reorganization of companies and with Specific purposes, implies that the tax planning process has a logic of efficiency, rationalization, that tends to improve the business organization and does not hide, on the other hand, a fraud against the law; When the only reason that supports the operations is avoidance, the aforementioned business reason can be rejected. 6 ° That the Internal Revenue Service has not attributed to the taxpayer the purpose of circumventing, for her benefit, the fulfillment of the tax obligations that may affect it. The judgments handed down do not take charge, to base the rejection of the claim, of the evaluative element that the Service itself categorically places as central to the concept of “legitimate business reason” and its definition: the absence of the motive and purpose – illegal – to avoid the payment of taxes. No recital slides, even, as a fact of the cause, that the business reorganization has had as an inspiring purpose, the fraud of fiscal interests. Under these conditions, it is not lawful to go beyond the limits of the legal precept and to censure – adding a new requirement – the intrinsic economic relevance of the operation, which is not part of the fiscal interest. 7º That, when resolving as they have done, the intervening magistrates, without considering that purpose as concurrent or proven in the record, which, because it is tax reprehensible, cannot legitimize the operation, have incurred in the infractions of the law that are denounced in the libel of cassation and must, consequently, annul the contested ruling.