The Reconstruction Law introduced a number of temporary measures with tax implications, included in the section titled “Other Provisions and Transitional Rules.” Among them, the handling of outstanding municipal charges blends an extraordinary and temporary regularization procedure, including a full waiver of interest and penalties, with a permanent strengthening of collection mechanisms, which will be transferred to the Treasury of the Republic of Chile (TGR, for its initials in Spanish). 

Ahead from the financial relief that this waiver represents for taxpayers with these debts, the new law introduces a structural change in the way city council business licenses and fees are collected, as they will turn into subject to rules equivalent to those applicable to national tax obligations. 

What does it involve? 

The law establishes an extraordinary procedure that allows both individuals and legal entities to regularize outstanding municipal charges, including circulation permits, commercial, industrial, professional, and other city council business licenses, waste collection charges, and other fees governed by Decree Law No. 3,063 of 1979 (Ley de Rentas Municipales, in Spanish), on condition that such debts gained during the three years preceding January 1st, 2026 and remain unpaid. 

The benefit consists of a full waiver of interest and penalties associated with the debt, requiring taxpayers to pay only the outstanding principal amount, adjusted for inflation. In addition, city councils may formally surrender their right to pursue collection of debts corresponding to periods that are already time-barred under the applicable statute of limitations. 

How to access the benefit? 

The taxpayer must submit a written application to the pertinent city council within 12 months from the first day of the month following the publication of the law, identifying the charges or fees to be regularized. The city council must issue a decision within 30 business days, calculating the outstanding debt, applying any required inflation adjustments, and granting the corresponding waiver of interest and penalties. 

If the application is approved, the taxpayer will have 12 months to pay the debt, or 36 months in the case of waste collection charges. City councils may also authorize installment payment arrangements or enter into payment agreements. 

The procedure also applies to debts that are currently subject to judicial collection proceedings, on condition that no final judgment has been issued. Once payment has been completed, the city council must withdraw its claim. 

Full payment cancels the city council’s right to pursue collection of the debt. However, if the taxpayer fails to comply with the agreed payment terms, the original debt will be reinstated together with all applicable interest, penalties, and inflation adjustments, deducting any amounts already paid. 

Collection by the TGR 

At the same time, and on a permanent basis, the law transfers responsibility for the collection of civic business licenses and civic charges to the TGR. City councils must submit a list of delinquent taxpayers to the TGR within the first fifteen days of March each year. Once the list has been submitted, the city council is no longer authorized to collect those debts, receive payments, enter into payment agreements, or grant waivers of interest and penalties. 

Collection will instead be carried out under the executive collection procedures established by the Chilean Tax Code, granting the TGR the same powers it currently has in relation to overdue national tax liabilities, including: 

• The attachment of a debtor’s assets, including bank accounts and uncollected funds. 

• The automatic offset of annual income tax refunds against outstanding civic debts. 

• A limited defense regime for debtors, consistent with executive collection proceedings. 

Any future waivers of interest or penalties will be governed by the permanent policies of the Chilean Internal Revenue Service (SII, for its initials in Spanish) and the TGR, in accordance with Article 207 of the Chilean Tax Code. 

Those policies were recently updated through Supreme Decree No. 437. Under the new framework, ordinary interest relief is limited to the additional 3.5% surcharge above the market rate, with the percentage of relief decreasing according to the age of the tax assessment. For assessments that are more than 24 months old, relief is no longer available, and the waiver of penalties is also eliminated. 

Practical impact for taxpayers 

The waiver of interest and penalties is available only during the 12-month extraordinary regularization period. Once that period expires, the same debt will be transferred to the TGR and become subject to a collection process designed to intercept tax refunds and apply them against outstanding debts, in addition to the other enforcement measures described above. 

The difference between the two regimes is significant. While the extraordinary regularization procedure provides for a full waiver of interest and penalties, the permanent regime established under Supreme Decree No. 437 substantially limits that benefit and eliminates it altogether for older debts. 

As a result, keeping civic obligations up to date becomes priority, as, these obligations will be subject to a framework similar to that applicable to national tax debts, with stricter enforcement mechanisms and more limited defenses available to debtors. 

Effective date 

The period for applying to the regularization program begins on the first day of the month following the month after the publication of the Reconstruction Law. Assuming the law is published during September, the 12-month application period will begin in November. 

Final considerations 

The combination of a temporary debt regularization program and a permanently strengthened collection system creates a new landscape for the management of civic obligations. The practical impact of these measures will depend, in part, on the guidance issued by the pertinent authorities. 

In this context, companies should review their position under both regimes in a timely manner. At first glance, the temporary provisions offer an attractive opportunity to regularize outstanding civic liabilities before the new collection framework takes full effect. 

For questions or advice regarding this matter or other tax-related issues, please contact our Tax Team. 

Information updated as of September 2026.