Administrative Controls to Prevent Fraud & Evasion
Establish the necessary administrative controls to prevent fraud and evasion. The information exchanged pursuant to the provisions of the preceding paragraph shall be considered confidential and can not be 
transmitted to any person other than the authorities responsible for the administration of taxes that are the subject of this agreement.
For purposes of this article, the competent authorities of the Contracting States may communicate directly with each other.
- Article 1 .- To approve the agreement to avoid double taxation between Member Countries contained in Annex I to this Decision.
- Article 2 .- To approve the Standard Agreement for the avoidance of double taxation between Member Countries and other States outside the Subregion, which appears in Annex II to this Decision.
- Article 3 .- The Member Countries shall, before June 30, 1972, the necessary steps to implement the Convention for the avoidance of double taxation between Member Countries in order to come into force in accordance with the provisions of the Article 21 of the Convention.
- Article 4 .- Should there be any difficulties or doubts arising in the implementation of the Convention to avoid double taxation between Member Countries that can not be settled through consultation referred to in Article 20 of the Convention, the record shall be submitted to respective Council Fiscal Policy for consideration.
The Double Taxation and International Agreement to Avoid
Important is to mention the provisions of Circular No. 64 of December 7, 2005 of the Internal Revenue Service which states:
On 27 October 1995, the Legal Department of the Ministry of Foreign Affairs issued the regular office No. 021 459, which refers to the effect in Chile of the Decision No. 40 of the Cartagena Agreement Commission and expressly pronounce on the validity of the above Conventions.
With respect to such subject matter can be reported that the Service refers to the rationale and conclusions put forward by the Ministry of Foreign Affairs in the individual and trade, in the sense of considering both the Convention for the Avoidance of Double Taxation between Member Countries of the Agreement Cartagena, as the Standard Agreement for the Avoidance of Double Taxation between Member Countries and other States outside the Subregion, which consist in Annexes I and II to Decision No. 40, do not have any national or international force for Chile, because they are not met, at the appropriate legal procedures that both the domestic legislation of Chile as the standards included in the Decision No. 40 and Decision No. 102 of the Cartagena Agreement Commission required for approval and entry into validity of those agreements.
In order to bring more clarity to what I said, is transcribed THE TEXT OF THE DECISION 40
DECISION 40
Approval of Agreement to avoid double taxation between Member Countries and the Standard Agreement for the conclusion of agreements on double taxation between Member Countries and other States outside the Subregion.
THE COMMISSION OF THE CARTAGENA AGREEMENT
HAVING SEEN: Article 89 of the Cartagena Agreement and Article 47 of Decision No. 24 of the Commission,
WHEREAS, the proposal of the Board, the Commission must adopt a convention aimed at avoiding double taxation between Member Countries and that, likewise, must approve a standard agreement for the conclusion of agreements on double taxation between Member Countries and other States outside the Subregion.
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Double Taxation in International Trading
“There is double taxation wider international or economic, when the same or similar tax is levied by various States under the same budget of fact for the same period of time. When you add “same person” (identity of the subject), we get the concept in the strict sense. ”
Found within this concept four facts that are configured for the existence of double taxation, these are, that there is a serious matter, which falls in the same person whether natural or legal person who would be the subject of tax, within the same period tax and there is similarity in relation to the tax applied.
No doubt this double taxation, which could be triple and even quadruple merely discourage trade relations between taxpayers in each country, as those who made international business operations will have to bear for the same operation more than a tribute.
It is for this reason that countries celebrate treated to eliminate or minimize double taxation by establishing certain procedures provided for that purpose which were mentioned in this paper.
Certainly this monograph is intended to provide the way Chile is facing this obstacle in negotiations with its peers, has concluded agreements and what currently exists in our laws concerning this issue.
Indication of the end of the conventions, their drawbacks, and the types of existing agreements, both the Andean Pact Decision 40 (Approval of Agreement to avoid double taxation between Member Countries and the Standard Agreement for the conclusion of agreements on double taxation between Member Countries and other States outside the Subregion) and the OECD convention, to finish with an illustration of the agreements signed by Chile with Argentina, which was his first treatise dated 07 March 1986 the treaty with the Kingdom of Spain on December 22, 2003, Andean Pact and OECD models, respectively.