Chile

National Reconstruction and Economic and Social Development - Law No. 21,850

On 17 October 2026, Law No. 21,850 “for National Reconstruction and Economic and Social Development” (the ‘National Reconstruction Law’) was published in the Official Gazette. The law introduces a broad set of permanent and transitional tax measures aimed at promoting investment and economic growth. The most relevant measures are summarised below.

Permanent measures

• Corporate income tax (First Category Tax [FCT]) rate reduction: The FCT rate is gradually reduced from 27% to 23% (27% for commercial year 2026, 25.5% for 2027, 24% for 2028, and 23% from 2029 onwards). The transitional rates for small and medium-sized enterprises (SMEs) under Law No. 21,755 (12.5% for 2026 and 2027 and 15% for 2028) are maintained and, from 2029, SMEs will be subject to the same 23% rate. Transitional rules reduce monthly provisional payments (PPMs).  

• Reintegration of the tax system: The partially integrated system (PIS) is replaced by a fully integrated system under which FCT is 100% creditable against final taxes. The FCT credit restitution obligation (currently 35%) is reduced to 30% for commercial year 2027 and 20% for 2028 and is eliminated from commercial year 2029. 

• New tax invariability regime: Local and foreign investors developing mining, industrial, forestry, energy, infrastructure, telecommunications, research, technological development, medical, or scientific projects of at least USD 50 million may enter into a tax invariability contract with the State for 10, 15, or 20 years, depending on the investment amount, in exchange for a 1.5% increase in the FCT rate. The regime is available from 1 January 2027. 

• Capital gains on listed securities: The 10% single tax on capital gains from the sale of publicly traded shares and mutual and investment fund quotas are eliminated, and such gains once again qualify as non-taxable income. 

• New FCT credits: (i) a credit of 15% (20% for employees working outside the Metropolitan Region) on wages paid by companies exporting knowledge-based services in the digital economy, capped at 75 monthly tax units (UTM) per employee per year; and (ii) a credit of up to UTM 100 per employee for employer-funded treatment of catastrophic illnesses. 

• DFL 2 housing: A new 5% single tax on rental income from the third economic housing unit onwards (up to 90 square meters), available to individuals and, by election, to legal entities. 

• Property tax: A 100% property tax exemption on the primary residence of individuals aged 65 or older. 
• Tax administration: The Internal Revenue Service (SII) is empowered to request and cross-check identified information from any State agency, and the General Treasury (TGR) is granted powers to collect municipal business licence fees and cleaning service charges, including through the withholding of income tax refunds. 

Transitional measures 

• Substitute tax on accumulated profits: Within eight months from the publication of the law, companies may elect to pay a 10% single tax, in lieu of final taxes and with no right to credit, on balances in the Reinvested Earnings Fund (FUR), the Total Taxable Earnings Balance (STUT), and excess withdrawals. 

• Regularization of assets and income held abroad: A voluntary 12-month regime applying a 10% tax on undeclared assets or income that remain abroad, or 7% where they are brought into Chile and invested locally. 

• VAT exemption on new housing: A one-year VAT exemption on the first sale of new homes that obtained final occupancy approval before the publication of the law. 
• Gift/donation tax: A one-time 50% reduction of the gift tax on donations to forced heirs granted by public deed within a one-year period. 
• Payment facilities: For 180 days from publication, the TGR may forgive up to 100% of interest and 80% of penalties on tax debts due on or before 31 December 2025, for individuals and SMEs. 
• Exporter VAT: The entry into force of the amendments introduced by Law No. 21,713 to the exporter VAT refund regime (Article 36 of the VAT Law) is tied to the issuance of the new implementing regulation.