The Government has submitted to Congress the National Reconstruction and Economic Recovery Bill, which includes a broad set of tax measures, both permanent and transitory. The bill combines investment incentives, employment support, and mechanisms to finance reconstruction efforts following the recent wildfires.
Below, a summary of the main tax-related measures, grouped according to their nature and purpose.
I. Permanent structural changes
1. Reduction of the First Category Tax
The bill proposes a gradual reduction of the corporate income tax rate (First Category Tax) applicable to taxpayers under the General Regime, according to the following schedule: 27% for tax year 2026; 25.5% for 2027; 24% for 2028; and 23% on a permanent basis as from 2029.
The gradual increase applicable to the Pro‑Pyme Regime is maintained; however, the previously contemplated 25% rate for tax year 2028 is replaced with a 23% rate, with the aim of aligning, in the long term, the tax rates of the General Regime and the Pro‑Pyme Regime, focusing differential treatment on taxable base determination rules.
2. Full tax reintegration
The bill provides for a return to a fully integrated tax system as from tax year 2029, allowing 100% of the corporate income tax paid by the company to be credited against Global Complementary Tax or Additional Tax payable by its owners, whether resident or non‑resident.
The transition to full reintegration is gradual. For credits generated in tax year 2028, a mandatory restitution of 30% will apply; for credits generated in tax year 2029, restitution will be reduced to 20%; and as from tax year 2030, the restitution obligation will be fully eliminated. Credits accumulated as of 31st December 2026 will be allocated first under the rules in force as of that date, followed by credits generated in 2027 and then those generated in 2028.
This measure reduces the effective tax burden for business owners who withdraw dividends and will require a reassessment of the optimal structuring of remuneration as salary versus dividends in cases where shareholders are actively involved in the business, as well as the timing of withdrawals during the transition period.
3. Elimination of the 10% single tax on capital gains from listed shares and fund units
The bill proposes eliminating the taxation applicable to the alienation of shares and fund units with stock market presence, reverting to the regime in force prior to Law No. 21.420 (treatment as non‑taxable income).
4. Employment tax credit
A new incentive for formal hiring is introduced, applicable to taxpayers under both the Pro‑Pyme Regime and the General Regime, consisting of a tax credit equivalent to 15% of individual monthly remuneration not exceeding 7.8 Monthly Tax Units (UTM, for its initials in Spanish) per employee, with a decreasing rate up to 12 UTM, and no credit above that threshold. The credit is applied sequentially against monthly provisional payments (PPM, for its initials in Spanish), VAT (IVA, for its initials in Spanish) and, finally, the First Category Tax (IDPC, for its initials in Spanish), with inflation‑adjusted carryforward to subsequent periods in the event of any remaining balance.
5. Property tax exemption for senior citizens
A new full exemption from Property Tax (Impuesto Territorial, in Spanish) is introduced for real estate owned by individuals aged 65 or older, with no cap on assessed value, provided that the property constitutes the taxpayer’s principal residence and coincides with the electoral address registered with the Electoral Service.
The bill includes a related‑party rule that prevents the exemption from being claimed with respect to properties acquired from related parties within the three years prior to the filing of the relevant sworn statement, unless the taxpayer demonstrates that the transfer was based on reasons other purely tax‑driven considerations
6. Elimination of the SENCE tax incentive
The credit against the First Category Tax (IDPC) for training expenses established under Law No. 19.518 is repealed. Within it, together with the new employment tax credit, the tax incentive is redirected away from corporate training and towards formal hiring.
II. Optional permanent regimes
6. New tax regime for small DFL 2 residential properties
The current DFL 2 regime remains in force for the taxpayer’s first two “small residential properties” (treatment as non‑taxable income). However, a 5% single tax is introduced as from the third small residential property onward, for units with a constructed area not exceeding 90 square meters per unit. The tax is calculated on the gross amount of rental or exploitation income, with no deductions.
Application of the regime differs depending on the type of taxpayer. For individuals, the regime is mandatory from the third small residential property onward and does not apply where the properties are allocated to a sole proprietorship. For legal entities and individuals whose properties are allocated to a sole proprietorship (the latter also from the third property onward), the regime is optional: taxpayers must notify the election to the Chilean Internal Revenue Service (SII) in the commencement of activities notice or within the timeframe determined by the SII, and once elected, it must be maintained for at least five consecutive tax years. Once withdrawal from the regime has been notified, the taxpayer may not re‑enter.
Payment of the 5% single tax fully satisfies income taxation; therefore, the income may be freely withdrawn.
7. Twenty‑five‑year tax stability regime for foreign and domestic investors
A significant incentive is introduced for investments exceeding USD 50 million, granting long‑term legal certainty under a guaranteed effective tax burden of 35% for foreign investors, and the maximum effective income tax rate applicable under the rules in force at the time of the investment agreement, for domestic investors. The regime covers sectors such as mining, industry, energy, infrastructure, telecommunications, R&D, health and science, with implementation periods of up to 8 years (extendable to 12 years in mining) and 3 years in other cases.
The regime also includes a benefit integration mechanism: if, during the term of the agreement, a more favorable tax rule is enacted for the investor, it will apply in replacement of the stability regime without any need to waive benefits. The stability regime covers, among other matters, rules on asset depreciation, loss carryforwards, and organization and start‑up expenses.
In the mining sector, an important particularity should be noted: the Mining Royalty under Law No. 21.591 shall be excluded for purposes of calculating the 35% effective tax burden. This means that, in mining projects, the effective tax burden may end up being significantly higher than 35%, since the royalty applies in addition to that rate. What the bill does guarantee is that the Mining Royalty rules in force as of the date of the agreement will remain unchanged for the duration of the regime.
8. VAT exemption on the sale of new homes
A 12‑month VAT exemption is proposed for the sale of new homes with final or partial municipal acceptance. Exempt sales do not affect the seller’s right to input VAT credits, which may be credited against other output VAT liabilities or, alternatively, capitalized as part of the cost of the goods or deducted as an expense. Sales executed by public deed between the date of submission of the presidential message and the date the law enters into force will also benefit from this exemption, with the right to request a refund of VAT already paid.
III. Estate planning opportunities
9. Donations
A transitory 50% reduction in gift tax is proposed for donations formalized by public deed within one year from the first day of the month following publication of the law. These donations are exempt from the court‑approval procedure. The gift tax payable by the donee may be financed through loans from the donated companies or related entities, without triggering the penalty tax for deemed dividends under Article 21 of the Income Tax Law. If the donated assets are disposed of within three years following the donation, their tax cost will be the same as it was for the donor.
The benefit is subject to distribution limits: at least 50% of the donated value must be allocated to the donor’s legitimaries, and at least 25% to beneficiaries of the improvement portion (cuarta de mejoras), with the remaining 25% benefiting only those same persons in the proportions determined by the donor. Donations to other persons do not qualify for the reduction. In addition, the donor is limited to donating up to 75% of total net worth.
10. Capital repatriation
A voluntary, transitory and extraordinary 12‑month regime is proposed allowing certain taxpayers to declare previously undeclared foreign assets and income. The declaration is subject to a 10% single and substitute tax on the declared value, with a reduced rate of 7% if the assets or income are effectively brought into Chile and, in the case of income, remain invested in Chile for at least five years. Only assets acquired prior to 1 January 2025 and income generated up to 31st December 2025 are eligible.
11. Regularization of accumulated profits (FUR/STUT and excess withdrawals from FUT)
A 10% single tax, with no entitlement to associated tax credits, is proposed as a substitute for the final taxation applicable to the Reinvested Profits Fund (FUR, for its initials in Spanish), the Total Taxable Profits Balance (STUT, for its initials in Spanish), and excess withdrawals from FUT. The election may be exercised within eight months from publication of the law, with respect to balances determined as of 31st December 2025 or 31st December 2026, as applicable.
IV. Liability regularization
12. Relief for tax debts of individuals and micro, small and medium‑sized enterprises
To facilitate the regularization of accumulated tax debts, the General Treasury of the Republic is authorized to grant payment facilities with respect to taxes owed up to 31 December 2025. The bill proposes relief of up to 100% of interest and 80% of penalties for lump‑sum payments, and up to 95% of interest and 75% of penalties in the case of payment arrangements, with a down payment of at least 10% and up to 24 installments. This authority may be exercised for 180 days from publication of the law.
13. Regularization of municipal debts
A procedure is proposed to regularize municipal debts of individuals and legal entities with unpaid municipal charges (including vehicle registration permits, commercial, industrial and professional licenses, sanitation and waste collection fees, among others) accrued within the three years prior to 1st January 2026. The procedure allows for full relief of interest and penalties and authorizes the municipality to waive collection actions for periods subject to the statute of limitations. The taxpayer must file the request with the municipality within 12 months from the first day of the month following publication of the law; once approved, the municipality issues an assessment with a payment term of up to 12 months (or 36 months in the case of waste collection fees). The procedure also applies to debts under judicial collection, provided there is no final judgment.