Chile: Proposed tax changes in national reconstruction bill
The proposed legislation would introduce changes to corporate and individual taxation, VAT, and administrative procedures.
may 20, 2026
Draft legislation, the Law for National Reconstruction and Economic and Social Development, includes the following tax changes.
- Corporate income tax rate reduction: The proposal would provide a gradual reduction of the corporate income tax (CIT) rate from 27% to 23% by tax year 2029 for companies subject to the general regime.
- Total integration of CIT with final taxes: The total integration of the Chilean tax system would be restored, allowing CIT paid by a company to be fully creditable against the final taxes of the owner, which would become effective January 1, 2027.
- Elimination of capital gains tax on publicly traded shares: The 10% tax on capital gains from the sale of publicly traded shares and investment funds would be repealed, expressly classifying these gains as non-taxable income.
- PPM rate reduction: The rate to determine the monthly provisional payment (PPM) under the small and medium-sized enterprise (SME) regime would be reduced to 0.23%.
- Repatriation of assets and income located abroad: A voluntary system would be established for the repatriation of assets and income held abroad, applying a 10% substitute tax that would be reduced to 7% if assets are repatriated and invested in Chile for at least five years.
- Substitute tax for accumulated profits: A voluntary, transitory regime would allow taxpayers to regularize historical balances pending taxation with final taxes through the payment of a 10% substitute tax.
- Temporary VAT exemption for sale of new homes: A temporary VAT exemption would apply to the first sale of new homes for one year following the publication of the law.
- Temporary reduction of gift tax: A temporary 50% reduction in the gift tax would be implemented for one year, subject to specific conditions regarding the donor's beneficiaries.
- Reduction of land tax: A 100% exemption from the land tax would be provided for the main residence of individuals aged 65 or over.
- Changes in treatment of DFL 2 homes: A new special regime would apply a 5% single income tax on rental income from economic housing starting from the third home.
- Tax certainty: A tax certainty statute would be created for foreign and local investors for projects involving a minimum investment of US$50 million, guaranteeing specific tax conditions for 25 years.
- Facilities for the payment of tax obligations: Special facilities would allow Treasury to forgive up to 100% of interest and 80% of fines for cash payments on tax debts due until December 31, 2025.
- New audit powers of the SII: The audit powers of the internal revenue service (SII) would be strengthened to request and cross-check information from other state administration structures.
- Interest forgiveness and penalties for municipal rights debts: An extraordinary procedure would provide forgiveness of interest and fines on municipal fee debts accrued within the three years prior to January 1, 2026.
- Credit for payment of remuneration: A new tax credit of up to 15% would be created to protect formal employment based on remuneration paid to workers.
- Elimination of SENCE credit: The current credit for worker training expenses would be repealed.
Read a May 2026 report prepared by the KPMG member firm in Chile