Yesterday, September 9th, the Executive submitted to Congress the Capital Markets and Homeownership Financing Reform Bill, aimed at developing Chile’s capital markets by broadening access for investors to financial instruments, reducing transaction and compliance costs, and introducing amendments to various tax regulations.
What does the reform propose?
1. Bonds and fixed-income instruments: The bill would make it easier for gains from these investments to qualify as non-taxable income. In addition, it removes the current 4% additional withholding tax on interest derived from these instruments and excludes them from the definition of Chilean-source income for non-resident investors.
2. Capital gains on shares and investment funds: It replaces the current stock market presence requirement used to access the non-taxable income benefit with a minimum free float of 15%, increasing the number of issuers whose investors may qualify for the benefit. It also broadens the range of eligible assets for investment and mutual funds.
3. Foreign investors: Foreign investors would no longer need to obtain a Chilean Tax Identification Number (RUT, for its initials in Spanish) when investing in instruments whose returns qualify as non-taxable income under Articles 107 and 104 of the Income Tax Law.
4. Exported financial services: The bill seeks to reverse the restrictive interpretation adopted by the Chilean Internal Revenue Service (SII, for its initials in Spanish) and exempt from VAT (IVA, for its initials in Spanish) certain asset management and wealth advisory services provided in Chile to non-resident clients.
5. Stamp Tax: The proposal seeks to align foreign financing with domestic financing by eliminating an asymmetry that currently increases the cost of obtaining credit abroad.
6. Derivatives: The reform replaces mark-to-market taxation with taxation based on accrued or received income and requires the SII to issue a prior notice before reassessing the value of derivative contracts. It also amends the penalties for non-compliance with tax reporting obligations.
7. New incentives: The bill creates a special framework for start-ups and mining exploration activities, as well as two capital gains tax regimes subject to a 10% tax rate for investments held for a minimum period of five or three years, respectively.
These amendments seek to bring Chile closer to international financial market standards by correcting distortions and reducing burdens and frictions that may discourage capital investment. In doing so, the proposal represents a shift from recent tax reforms, which have primarily focused on increasing revenue collection and reducing opportunities for tax avoidance.
At the same time, however, rather than simplifying the system, the bill would introduce additional special regimes. Furthermore, regarding anti-avoidance measures and information exchange, it would eliminate two existing control mechanisms applicable to foreign investment: the 4% withholding tax and the requirement for non-residents to obtain a Chilean Tax Identification Number (RUT).
The bill is still at an early stage and must now go through the congressional process, where further amendments may be introduced.
Content updated as of September 2026.