Baraona Fischer & Cia, winner of the 2019 “Law Firm of the Year” award for Tax Law in Chile, is taking an active role in navigating new regulations and developments in its country. In an interview with Best Lawyers CEO Phillip Greer, senior partner Juan Manuel Baraona discusses these changes and the positions of the business and legal communities in a moment of change.
What achievements are you most proud of from this past year that led to Baraona Fischer & Cia being named a "Law Firm of the Year" for Tax Law?
Juan Manuel Baraona: More than achievements in certain specific cases we are proud of our excellent team, our permanent policy of providing the best legal advice to clients and of maintaining with them a close and professional relationship.
Can you tell us about one or two of your landmark cases?
In the day to day of professional practice, it is difficult to select specific cases. I do recall the first favorable Supreme Court decision in a transfer prices case. To this, I must add two important cases before the Internal Revenue Service related to differences in deductible expenses for tax purposes.
Are there any other attorneys at your firm whom you would like to recognize who greatly assisted the firm in winning these decisions?
Success belongs to all intervenient partners and associates. I must acknowledge, however, the leading participation of my partners Carolina Collantes, Alex Fischer, and Juan Cristobal Ortega in conducting these cases.
Baraona Fischer & Cia seems to have a close relationship with the University of Chile. Does that relationship play a strong role in the firm’s recruiting strategy when looking for new talent?
I have been a professor at the Universidad de Chile Law School for many years and so it has been my partner Carolina Collantes. Several of my partners and many associates are graduates from the university as well. But many of them also come from other important Chilean universities and have joined the firm only because of their academic and professional credentials. In terms of recruitment strategies, our policy is absolutely neutral in all respects.
Does your firm have a mentorship program? What does your firm do to help support your practicing attorneys?
Our firm has established an internal policy of professional development for associates and a program that encourages them to pursue studies in higher education institutions both in Chile and abroad.
Do you see Tax Law changing in Chile in the coming years?
The Chilean tax system has undergone important changes in recent years and I believe that this situation will continue in the future although in a somewhat different direction. During the previous administration, income taxes were amended, establishing a new regime for business entities and profit distributions considered by many as inconvenient, administratively complex, and discriminatory among taxpayers in similar situations. The new government has sent a bill to the congress, which aims to reverse some of the main provisions of the current tax system.
Have there been any important policy changes locally or abroad that have impacted Tax Law in your country?
With regard to domestic legislation, the most important change will be the possible approval of the aforementioned bill that has been a matter of tough negotiations between the government and the opposition parties, the outcome of which may not be anticipated.
As to international aspects, progress continues regarding the strengthening of relations with tax administrations with other countries.
How has the 2018 tax reform bill impacted your clients and the way you approach certain cases?
Our policy has always been to maintain a permanent relationship of contact and information with clients, which will surely be continued and increased as a result of changes in the new legislation. Such modifications will not affect past situations but rather future ones.
How is your firm helping clients learn about and stay compliant with the new tax laws?
The business community is having an active participation in the public discussion of the bill in the media, in the political arena, and government circles, a task in which we have also participated. Regarding our clients, the communication has been continuous through the normal contact channels, as well as through a web page designed specifically for this purpose.
In what ways has technology affected Tax Law?
In recent years the Chilean tax system has really experienced a technological revolution, in terms that almost everything is computerized, both for the IRS and for taxpayers, to such an extent that it can be said that the vast majority of tax stuff as accounting records, control procedures, and other relations between the authority and the taxpayers are made by computer. More than 95 percent of the tax returns computationally delivered.
The Chilean tax system has undergone important changes in recent years and I believe that this situation will continue in the future although in a somewhat different direction.
How does Baraona Fischer & Cia stay agile against competitors in Tax Law?
Easy. Keeping our team in shape and maintaining our links with clients.
Is there anything else you would like to share with me about your firm–either for this practice area or for other groups the firm is particularly proud of?
As to the tax practice, I would like to thank Best Lawyers for qualifying us as the Tax “Law Firm of the Year” as it means recognition for all of us who work for the firm. I must add that I am especially proud of the constant and strong growth of the other areas of practice that have contributed in a very important manner to the development of our firm.