The Tax Reform Bill that was introduced by Chile’s government in July 2022 was rejected on March 8, 2023, by the House of Representatives (Cámara de Diputados).1 The initiative did not achieve the required quorum, with 73 in favor, 71 votes against, and 3 abstentions. The bill included several significant reforms, including a new higher tax bracket of 43 percent to apply for monthly resident income tax withholdings (Second Category Tax) and annual tax (Global Complementary Tax), increasing the medium- to high-income brackets, a new capital gains tax in respect of Chilean securities, and eliminating the current rental income exemption.
Since the initiative was first introduced in early July 2022 by the government, the original text had been subject to various amendments by the different parties involved. (For prior coverage, see GMS Flash Alert 2022-147, August 8, 2022.) However, the bill did not obtain the required support when the legislation was voted on in the House of Representatives.
