The tax measures included in the “Reconstruction Plan”

Tonight, in a nationally broadcast presidential address, President Kast is expected to publicly present the “Reconstruction Plan” (or “Omnibus Bill”), which would include a package of 40 extraordinary economic reactivation measures, among them several significant tax changes.

What do we know so far?

In general terms, the tax measures known to date appear to pursue three main objectives:

(i) immediate reactivation of the real estate sector and employment;

(ii) a structural reduction in the corporate tax burden; and

(iii) greater long-term tax certainty for investment projects.

Based on the information currently available, the package is expected to include the following measures:

1) Reduction of Corporate Income Tax (First Category Tax)

The corporate income tax would be reduced from the current 27% to 23%, gradually over a three-year period, reaching its steady-state rate in 2030.

2) Reintegration of the tax system

The Chilean income tax system is "integrated", which means 65% of corporate income tax paid by the company is creditable against WHT applicable to dividends. Under the new bill, the corporate tax credit would return to 100% creditability for companies subject to the general regime, restoring a fully integrated tax system similar to the one in place prior to the 2014 tax reform.

This measure would also be implemented gradually: the credit would increase from 65% to 100% over three years, at a rate of one-third per year.

3) 0% VAT on the sale of newly built residential property

A temporary 12-month VAT exemption would apply to the sale of newly built real property.

Once approved, the exemption would become effective as from the date on which the bill is submitted to Congress. According to the latest draft version available, no cap on property value would apply.

4) Temporary reduction of inheritance and gift tax

Inheritance and gift tax would be temporarily reduced by 50%, and the court approval requirement for gifts (insinuación) would be eliminated.

5) Capital repatriation programme

A nine-month window would be opened to repatriate undeclared foreign assets, subject to a one-time tax at an 8% rate.

6) Tax stability regime for large-scale investments

The bill would include a tax stability regime for investment projects of USD 50 million or more, granting stability for a period of 20 to 25 years.

Unlike the now-repealed Decree Law 600, the regime would apply to both foreign and domestic investors.

It remains unclear which specific taxes and tax attributes would be covered by the stability protection, and whether access to the regime would follow a contractual or administrative approval mechanism.

7) Elimination of the 10% tax on stock exchange capital gains

The 10% tax on capital gains from the sale of publicly traded shares would be eliminated, reinstating an exemption regime similar to the one historically provided under Article 107 of the Income Tax Law.

8) Property tax exemption for senior citizens

Real estate tax would be eliminated for the primary residence of individuals aged 65 or older, with immediate effect.

9) Employment subsidy or tax credit for formal employment

The bill would include a subsidy or direct tax credit against corporate income tax for companies that provide formal employment to individuals at risk of labour informality.

The scope and eligibility requirements of this measure are not yet known.

10) Measures without detailed specifications

The Omnibus Bill is also expected to include: an extension of the DFL-2 housing benefit to a greater number of properties (currently limited to two per individual), and

potential restrictions or amendments to the General Anti-Avoidance Rule (GAAR).

The bill is expected to be submitted early next week to the Chamber of Deputies, initiating the legislative process.

At ValleNorambuena, we are closely monitoring developments and will keep our clients informed in real time regarding the final content of the bill and its potential impact on their investment structures, financing arrangements, and tax planning strategies.