Maximiliano Concha Rodríguez is counsel with PAGBAM | Schwencke, Chile, the ILN’s member firm. In this episode, Lindsay and Max chat about the unending tax reforms in Chile, the recent tax treaty between the US and Chile, and his secret superpower as a firefighter.

You can listen to the podcast here, or we’ve provided a transcript of the highlights below.

Lindsay: Hello and welcome to the Law Firm ILN-telligence Podcast. I’m your host, Lindsay Griffiths, Executive Director of the International Lawyers Network. Our guest this week is Maximiliano Concha, with PAGBAM ǀ SCHWENCKE, in Santiago, Chile. Max, we’re so glad to have you with us. Thanks so much for being our guest this week. We’d love to hear a little bit about your practice and the firm, so why don’t you tell us a little bit about that?

Max: Hello, everyone. Welcome to the LN podcast. As Lindsay just said, my name is Max Concha. I’m a 35-year-old lawyer, based here in Chile. I’ve always been working in tax law. I’ve been working in Chile for a while. I also completed an LLM program in UC Berkeley, and I then gained some experience in the US, working at EY, in New York City. But now, I’m back in my home country, and I’m working at PAGBAM ǀ SCHWENCKE, which is an Argentinian law firm, actually, with offices in the South America and in the US.

Lindsay: Cool, very cool. So, what would you say, at the moment, is your biggest challenge, and how are you working to overcome that?

Max: Yes. I would say that the biggest challenge is keeping up to date with all the tax reforms that Chile has undergone in the past decade. If I’m not mistaken, we have experienced one each year. So sometimes, I find myself navigating between five or six tax systems at the same time when analyzing a specific matter. Well, that, the fact that some amendments were proposed but not approved by Congress. So, I remember once in a meeting saying, “Did I dream this or what?” Because I was looking for an amendment and I wasn’t able to find it. And why? Because Congress never approved it. So, these are some challenges that I face sometimes.

And you also ask me how to overcome it, right? And I think there’s no secret there. I just, more exposure and just keep on learning. I mean, the more situations I face, the better I get, I think. But it’s still a bit frustrating, frustrating to tell clients, “I’ll need to take a closer look at this,” when before tax reforms, before 2014, it was a direct yes or no answer. So that’s sometimes frustrating, yes, I would say.

Lindsay: Yes, I would imagine that is frustrating. Because I think in a lot of other areas of law, and for tax lawyers in other countries, there’s probably a little more consistency. And so, for you, I mean, it sounds like you almost have to, clients would expect you to have some idea of what’s going on, but it’s through no fault of your own, you have to keep going back and just making sure that the law is up to date, and, as you say, reforms have actually gone through that they’ve promised are going through.

Max: Exactly, yes. We’re now facing a new tax reform, so yes, still more to add.

Lindsay: Amazing, amazing. So, can you talk to us a little bit about the current state of the market then for your clients?

Max: Yes. Locally, well, I was just talking about this imminent tax proposal looming over us, and there’s quite a vast of uncertainty circulating among our clients. It’s like waiting for a storm to hit because they announced it two years ago. Congress didn’t approve it, so it’s coming again. So, it comes again with different tweaks. So, clients are coming to us with a lot of questions and what just, we’re here to attack them. What we do is just monitoring to be prepared for, to assist our clients.

Lindsay: Yes.

Max: I mean, certainly, after that, sorry, I have another state of the market, but I wanted to look at it from a global landscape. One hot topic that it’s been over, I think, everyone’s radar recently is a recent tax treaty between Chile and the US, enacted on January this year. And I think it’s a game-changer for many. It’s opening new opportunities, but also, at the same time, facing some new challenges.

Lindsay: Oh, sure. Yes, I can imagine that any big change would involve opportunities and challenges.

Max: Right. I mean, we’re used to have, Chile, it’s a small country, but still we have, I think, a lot of tax treaties, but we also, we always keep this OECD tax model. But now, we’re facing the US tax model, or tax treaty, so it has some differences that you might need to [inaudible 00:05:43].

Lindsay: Of course. Do you think it helps, I would imagine that it does help, that you practiced for a little while in the US?

Max: Yep, that helps a lot. I’m familiar, I’m really familiar with the W8s, W-9, with the beneficial ownership exceptions. And so, yes, that helps a lot. And I have gone through this before, so that’s something that clients thank.

Lindsay: Absolutely, absolutely. What challenges do you think that the legal profession, in general, are facing today and how are those being addressed?

Max: Well, I would say that every once in a while… I want to answer this question from a tax practice. So, every once in a while, you get clients that start questioning your tax system and they start having these impossible solutions that they might work in their jurisdiction, but they want here in your country, because your law and your tax system. But they keep you thinking, because if you look did from a different angle, these ideas actually make sense.

They say, “Why should we pay taxes in this particular occasion if I’m, for example, not making profit?” And you start thinking about it and, yes. And you start saying, “Yeah, why?” So, the easy part is to answer the questions. I mean, you read, you understand it, and you can send an answer. But then, these questions stay in my mind, they stay in my mind. And even after I provide the answer and I start reflecting about our tax system, our tax policy and see why some good ideas just can’t, just don’t fit in our system.

Lindsay: Yes. Yes, those are good questions. I often wonder that as a business owner too.

Max: Yes.

Lindsay: What would be the biggest area that’s related, either to your practice as a tax lawyer or the legal industry, in general, that you’re curious about at the moment?

Max: Recently, I’m curious about the OEC BEPS initiative. So, BEPS is base erosion and profit shifting, which is, it’s coming maybe 10 years ago, I’m not sure about that time. But it’s initiative from the OECD, and particularly Pillar Two. And if the audience is not familiar with Pillar Two, just ensure it’s basically a group of people that are worried about global tax avoidance. So, they agreed to reduce the global minimum tax. And this global minimum tax comes to ensure that multinational corporations pay their fair taxes in every jurisdiction that they operate. So that’s basically Pillar Two.

And what’s especially fascinating, it’s how developing countries, just like Chile or in South America, will navigate this to implement Pillar Two. Because every time, for example, we recently faced MLI, which is another big, important change from the OECD, that’s faced some challenges. Might be similar to Pillar Two, to that, to these new rules. But there’s also another challenge that I’m really curious about and I’ve been reading. I don’t know if you know Professor Parada, who is a tax professor from the University of Leeds.

And this professor has some, he’s saying he’s investigating why even though these countries are not… I’m sorry, let me say that again. Even though these countries can collect more taxes through this Pillar Two proposal, they might be, at the same time, losing their ability to even get more income or collect more taxes on other sources. And why? Because the way that these undeveloped countries compete in the global economy, sometimes it’s taxes.

So, if you take out that barrier or that competition they have among taxes, now they’re not competitive with the other neighboring country, for example, or a developed country. So, they lose that chance to get new investments through more efficient or use tax rates. And Professor Parada, from the University of Leeds, has a bunch of papers about it and it’s really interesting to read about it.

Lindsay: Yes, that sounds like a very important competitive advantage and one that’s very necessary, especially in today’s global market.

Max: Exactly. And, for example, if you get… This country sometimes, like Chile, I would say, consumption tax, which is our VAT, they call it in Europe. That’s the tax that more income provides to our country. So, if we’re facing a situation where we cannot compete through tax, I’m not saying that Chile’s a tax haven, but it might be in some industries that we have preferential tax treatment to some industry for investments. And if you’re taking out from us or from other the underdeveloped countries, you’re also taking another part of another sources of income, like consumption tax or personal taxes as well.

Lindsay: Absolutely, absolutely. Yep. No, that’s very important. So, switching gears a little bit, can you tell us something interesting about yourself that most people don’t know?

Max: Yep. Well, I’m a firefighter, that’s a thing. Some people find it interesting. So, if you don’t find me studying or working in tax-related issues, I’ll be in some trainings or collaborating with a community as a firefighter. And I think that helps a lot. Of course, there’s this teamwork, this leadership. But I think that, for example, I don’t know, sports can give you that, but helping others in their greatest need, I think that’s something that few, I would say, hobbies can give you. So, I’m very thankful for it, and it comes from an old tradition. My grandpa started it and I’m still following this volunteer firefighter idea. So yes, I’m really proud about it.

Lindsay: Wow. Yes, you should be. That’s really incredible.

Max: Right.

Lindsay: I did not expect that. Wow, that’s amazing. Very incredible. So maybe this relates to that, but can you tell us about who has been your biggest mentor throughout your career?

Max: Well, not related to firefighter world, part to faith, but I’m going to get back some few years in my life. And I’m going to say that my former supervisor at EY, when I was working in New York. She was like a guiding light. Of course, she was really good at the technical knowledge, but the most valuable lessons, let me say that she was really good how to lead a team, effectively leading a team.

And the most important thing that I would take off from her is empowering each other, her team empowering. Sorry. I would say that empowering each of us that work for her to reach our full potential. That was something that when you work with her, I don’t know why, but answers were smarter, and your PowerPoints were better, and your calculations were even better. I don’t know, she gives you some trust and some collaboration that was great to work with.

Lindsay: That’s incredible. That’s-

Max: Yes.

Lindsay: I think that’s the leader all of us who have the opportunity to be in a leadership role aspire to be.

Max: Yep. I try to remember it every time that I need to work with the junior associates. It’s hard, it’s hard. Just something that you are or you’re not a good leader. And especially if you want to, as I said before, get the full potential of the people you work with. Honestly, I have some since tried, but she has this, I don’t know, magic touch, let’s say.

Lindsay: That’s incredible. That’s really incredible.

Max: Yes.

Lindsay: What do you think is something that people misunderstand about your field of work?

Max: Well, many clients don’t involve their tax lawyers in their business ideas until the deal is nearly finalized. And, of course, they should address tax considerations and that this can impact their business decisions. So, I will recommend all our clients to involve their tax lawyers at the beginning, of course, to avoid these mistakes. And this is not, let me be clear here, this is not overshadowing other aspects of the deal, it’s just about providing a guiding and holistic guideline to ensure all aspects, and including tax.

Lindsay: Absolutely. And I would say, especially in Chile where it sounds like things are changing or you need to know what the tax implications are. And I would imagine that if the lawyers are having trouble keeping up with the tax codes, there’s no way that the business owners can keep up with the tax codes. So, you definitely want to keep your lawyers, your tax lawyers, involved at every stage of the deal.

Max: Right. Exactly. Formulas from last year might not be efficient now. Right.

Lindsay: Right, right. And what I’ve learned over time with working with the ILN, especially, is that our corporate lawyers don’t have time to stay up to date with tax law. So, you need to have your tax lawyers involved in the deals to have the specialized lawyers be a part of that.

Max: Yes. And I think that might be frustrating for the deal, and we take our time. But yes, with something takes a bit longer than expected and the deals need to go up, for example, or bonuses need to be sold or offered in certain time of the day, and we take a little bit of time. But yes, I think it’s worth it.

Lindsay: Absolutely, absolutely. So, what would you say is the most important lesson that you’ve learned over your career?

Max: Over my career, I think this is, I want to go back to the world of firefighting, and together with this, let’s say, volunteer and my professional work, I think that building stronger relationships must be an important lesson. It helps when you are in danger and also helps when you’re in big, sorry, helps when you’re in danger and also helps if you’re under stress or under a lot of work.

People sometimes say it’s not just about what you know, but about who you know. And that thing, and I think relationships then are important. So, for example, well it’s like, I think that for PAGBAM ǀ SCHWENCKE, where I work at, we are really worried about relationships. So, when we entered this ILN membership, we really looked into the opportunity that this would provide us to relate to legal professionals, like me, and expand our network. So yes.

Lindsay: Absolutely. Obviously, I couldn’t agree with you more. That’s very true. And can you tell me then about a client that may have changed your practice?

Max: So, I think I already said this before in the podcast, but remember when I want to tell you about people that come with impossible solutions, and they are questioning your tax system? Well, recently a client, a commercial airline client, started asking about think-up rules. I said, “Yes, okay, you got to pay here and these cases and this threshold.” And he was like, “But I’m not making any profit. Why are you taxing me?” And I don’t like to say, “Well, that’s the law. I’m so sorry.” There should be a reason behind it.

So yes, I don’t say this changed my practice, that’s before and after this question. But, again, these questions that come to over my head and I keep reminding, and they stay even I answer the question. So, in this case, it’s forced me to revisit the policy behind the rules. And I think in that case, when I went back to the law and went back to the Congress discussion, I think this client was in this case absolutely right. I mean, doesn’t make any sense, but we were taxed. Oh, well.

Lindsay: That’s a good one. That’s a good one. And so, one final question to wrap up. I always like to answer, ask everybody this question and that is, what is one thing you’re enjoying right now that has nothing to do with work?

Max: I don’t want to say kids, because I think that’s too easy to answer, and maybe not that true, but not related to work.

Lindsay: Sometimes the toughest question for everyone to answer.

Max: Yes, I mean I have my hobbies. I like going out and doing some sports, but I would say that getting back with old friends is always great. We have here in Chile, it’s small country so I would say that there’s two or three blocks that all tax, not tax, all law firms are gathered, which is about two or three subway stations away. So, it’s easy to just give a call to a friend, an old friend from law school or from school, and just have a nice time and have lunch. So, I’m trying to do that every once in a while. It’s hard, I know. You have got to keep up with work. But yes, I enjoy it every time I do it.

Lindsay: That’s really wonderful. I love that. Well, thank you so much, Max, for joining us this week. I really appreciate it. And thank you so much to all of our listeners. We appreciate you as well. Please take a moment to rate, review, and subscribe on Apple podcasts or wherever you listen to podcasts. Every time you take a moment to rate or review us, it helps other listeners who love listening to podcasts, like ours, to find us. And we’ll be back next week with our next guest and thank you so much.Max: Thank you, Lindsay, and thank you ILN for providing this platform just to share some insights and next change ideas.