Last Wednesday, in a nationwide broadcast, the President of the Republic announced the submission to Congress of the Reconstruction and Economic and Social Development Bill, an initiative which, according to publicly available information, includes over 40 measures structured around five pillars. Below, a summary of the ones with greatest tax and economic impact, based on information released in the press and in the President’s address. This information should be verified when the bill is formally submitted to Congress.

For ease of understanding, we have classified the measures into the following categories, according to their underlying purposes: (i) Economic reactivation; (ii) targeted benefits; and (iii) Tax revenue–raising measures.

I. Measures aimed at promoting economic reactivation

Income Tax

Reduction of the First Category Tax: gradual reduction of the corporate income tax rate from 27% to 23%. The implementation timeline is not entirely clear; it has been reported that the reduction could be phased in three years starting in 2028, with a possible extension through 2030.

Tax system reintegration: full tax reintegration in order that the tax paid at the corporate level may be fully credited against the taxes payable by the owners. Implementation of this transition could take place during three consecutive annual stages, until reaching 100%.

Reinstatement of tax stability: for up to 25 years for long-term investments exceeding USD 50 million.

Tax credit for salary payments: tax credit for salaries ranging between 7.8 Monthly Tax Units (UTM, for its initials in Spanish) and 12 UTM, equivalent to 15% for the lower bracket and gradually reduced to 0% for salaries exceeding 12 UTM. According to some media reports, this credit could be applied against monthly provisional payments (PPM, for its initials in Spanish), VAT (IVA, for its initials in Spanish) or the First Category Tax.

Elimination of the 10% single tax on the sale of market shares: Minister Quiroz mentioned this measure as part of the package, although the details of the proposal will only be known once the bill is available.

Reimbursement of investments following revocation of favourable environmental permits: reimbursement of already incurred expenses where the State revokes a favourable environmental resolution. No further operational, tax, or budgetary details have been provided.

Value Added Tax (IVA)

Temporary VAT exemption on the sale of new residential properties: a 12‑month exemption was announced, applicable to properties with provisional or final occupancy permits as of the date of publication of the law. According to some media reports, the exemption would apply as of the first business day of the month following publication and would also extend to storage units and parking spaces sold together with the property.

II. Targeted benefit measures

• Exemption from property tax for senior citizens: an exemption for the primary residence of individuals over 65 years of age, together with compensation mechanisms for the Municipal Common Fund.
• Tax benefits and payment facilities related to reconstruction efforts: expansion of the Emergency Fund for Fires, as well as powers for the General Treasury of the Republic to grant tax waivers and payment arrangements to affected taxpayers.

III. Exceptional measures with revenue‑raising purposes

• Declaration and repatriation of assets abroad: a 12‑month window is established for a voluntary and extraordinary declaration of assets or income located abroad, subject to a general single and substitute tax rate of 10%. This rate could be reduced to 7% if the declared amounts are effectively repatriated and remain invested for at least eight years in DFL2 residential properties or in securities meeting the requirements set out in Article 107 of the Income Tax Law. In the event of non‑compliance, taxpayers must pay the outstanding tax difference.
• Temporary substitute tax on credits subject to restitution: according to some media reports, within the reintegration of the tax system, a 12‑month window would be established to elect a 15% substitute tax in order to convert such credits into credits not subject to restitution.
• Temporary reduction of the donations tax: a 12‑month window was announced during which donations would be subject to only 50% of the tax.
  

Although the Executive announced the submission of the bill to Congress and requested its urgent legislative processing, several measures continue to be described in the press only as general announcements or alternatives under evaluation. Accordingly, their entry into force will depend on the text submitted to Congress, the legislative process, and the date of publication of the law.

The information contained in this note was prepared based on press coverage of the presidential announcement, pending the official publication of the Reconstruction and Economic and Social Development Bill and its accompanying documents.