On April 22nd, 2026, President José Antonio Kast introduced the bill titled “For National Reconstruction and Economic and Social Development,” a broad package of measures aimed at boosting economic growth and employment.
Tax measures
Among the permanent tax measures included in the bill are: a gradual reduction of the First Category Tax from the current 27% to 23% as of the 2029 business year; the reintegration of the tax system; the reinstatement of non-taxable income treatment for the transfer of shares in publicly traded corporations, mutual fund units, and investment fund units with stock market presence; a 5% single tax on income derived from the exploitation of economic housing; a Property Tax exemption for individuals over 65 years of age; and a tax credit linked to the payment of remunerations intended to encourage employment.
The bill also includes temporary measures, such as: a new tax stability regime for investors; a temporary reduction of up to 50% in the gift tax; the possibility of regularizing assets and income held abroad through a single tax at a rate of 10%, or 7% if the assets are invested in the country; the possibility of applying a 10% single substitute tax to amounts accumulated in the FUR and STUT registers, as well as excess withdrawals; and a temporary VAT (IVA, for its initials in Spanish) exemption for the first sale of residential properties, among others.
Status of the legislation
Following the Chamber of Deputies’ approval of the bill on July 16th, 2026, the Senate approved it with amendments. As a result of these modifications introduced by the reviewing chamber, the bill entered its third constitutional procedure, under which the Chamber of Deputies must vote on the amendments approved by the Senate.
In the event of rejection, a Joint Committee must be formed to review only the amendments made by the Senate and propose a consensus text to be voted on by both chambers.
Main amendments introduced by the Senate
1. Economic housing: The bill establishes a 5% single tax on income derived from the exploitation of economic housing, applicable beginning with the third property. The benefit applies to both individuals and legal entities; in the latter case, only if their sole business activity is the exploitation of housing.
The Senate limited the benefit to lease agreements entered into with unrelated parties. Regarding legal entities, it expanded the possibility of making investments strictly necessary for maintenance or preservation of cash flows and restricted access to VAT (IVA, for its initials in Spanish) refunds under Article 27 bis of the VAT Law.
2. Tax credits for remunerations: The bill approved by the originating chamber included a tax credit provided to the payment of remunerations. The credit amounted to up to 14% of the individual monthly remuneration for salaries of up to 7.8 Monthly Tax Units (UTM, for its initials in Spanish), with a gradual reduction up to 12 UTM.
The Senate completely restructured this benefit. It is no longer a general credit but is now targeted at companies that provide knowledge-based services in the digital economy classified as exports by the National Customs Service and that must be included in a catalogue prepared by the Ministry of Finance.
The credit is 15% of the portion of remunerations attributable to the export activity, subject to an annual cap of 75 UTM per employee. Additionally, the Senate introduced a new tax credit of 150 UTM per employee against First Category Tax for employers that finance catastrophic illness treatments for their employees or their family members.
3. Tax stability regime: The original bill established a 25-year tax stability regime for investments exceeding USD 50 million, available to both domestic and foreign investors. The Senate replaced this single term with differentiated periods of 10, 15, or 20 years depending on the amount invested. It also introduced a “stability cost”: the First Category Tax rate established in the corresponding agreement will be increased by 1.5 percentage points on income attributable to the investment, as consideration for the legal certainty provided.
4. Property tax: The bill provides a 100% Property Tax exemption for individuals aged 65 or older to their primary residence. The Senate added a new requirement: beneficiaries must be on date on municipal waste collection charges. It also extended the benefit to surviving spouses or civil partners over the age of 65 who, as heirs, effectively reside in the property, until their death.
5. Regularization of assets and income held abroad: The original bill allowed taxpayers to voluntarily declare before the Chilean Internal Revenue Service (SII, for its initials in Spanish) assets located abroad acquired before January 1st, 2025, as well as income generated by those assets until December 31st, 2025, where such income should have been taxed in Chile but was not duly declared or taxed.
The Senate expanded this window. Eligible assets now include those acquired before January 1st, 2026, while income generated by such assets may be regularized up to the date of declaration. Additionally, the Senate introduced a penalty equal to 20% of the declared value for taxpayers electing the reduced 7% rate who do not maintain the investment in Chile for at least five years.
6. Enforceability of invoices (Law No. 19,983): The Senate introduced amendments to this law. The changes prohibit parties from agreeing to payment periods exceeding 30 days and prevent purchasers from requiring invoice references beyond those expressly established by law.
Regarding supply and service contracts with public entities, the amendments limit payment periods established in tender rules to a maximum of 45 days.
7. Temporary reduction of the gift tax: The bill includes a temporary provision reducing gift tax by 50% for gifts made to forced heirs and beneficiaries of the improvement portion (cuarta de mejoras), up to an amount equivalent to 50% of the donor’s estate. It also allows such gifts to be financed through loans granted by the gifted companies or related entities without triggering the penalty tax established under Article 21 of the Income Tax Law.
Such loans must be denominated in UF and have a maximum repayment term of ten years. If the lending companies incur debt to grant these loans, the corresponding interest expense will not be deductible. Furthermore, if the donee disposes of the gifted asset within three years, the tax basis will be the lower of the donor’s basis and the basis that would have applied had the general rules been followed.
8. Substitute tax aplicable to FUR: The bill allows balances accumulated in the FUR and STUT registers to be subject to a 10% single substitute tax. The Senate added a rule requiring any FUR balances benefiting from this regime to be deducted from the tax basis of partnership interests acquired through the reinvestment of profits as from January 1st, 2015, as well as from shares acquired through the reinvestment of profits.
What comes next?
The amendments proposed by the Senate will be voted by the Chamber of Deputies on Tuesday, July 21st, which will determine whether the disputed provisions proceed to a Joint Committee.
Currently, the most controversial tax issue is the approval of the tax stability regime. Opposition lawmakers have announced constitutional challenges before the Constitutional Court (TC, for its initials in Spanish) against that provision and against the rules providing compensation to projects whose environmental permits are annulled. The Government, meanwhile, has raised constitutional objections to certain amendments approved by the Senate that, in its view, exceed the bill’s underlying purpose.
Another sensitive issue is the Property Tax exemption for individuals over the age of 65. Some opposition lawmakers have questioned the universal nature of the benefit and have argued that compensation mechanisms for the Municipal Common Fund (FCM, for its initials in Spanish) and municipalities should be strengthened, given that part of their revenues depend on this tax.