Chile's tax authority rules that carbon credits bought to cover a company's own emissions count as a deductible expense, but credits bought for resale must be booked as intangible assets and written off only when sold. 

RF Report

The Chilean tax authority (SII) has issued Letter Ruling No. 1529 of 22 June 2026, clarifying the deductibility of carbon credit purchases under amendments to Article 31 of the Chilean Income Tax Law that took effect in 2020.

The ruling examines whether money spent on carbon credits can be classified as a deductible business expense. While previous regulations rejected these deductions, recent legislative updates to the Income Tax Law now allow them if they are used to offset a company’s own environmental impact.

The ruling clarifies that under the current Article 31 guidelines, purchasing carbon credits to offset a company’s own emissions can qualify as a deductible expense because it carries the potential to generate future income. Specifically, if the acquisition of these credits is done to meet the demands of regulatory bodies, clients, investors, or to comply with industry standards, it is understood that the company is fulfilling applicable norms and potentially expanding its client base.

Conversely, if these credits are bought simply for resale as financial assets, they must be treated as intangible assets rather than immediate expenses.

If the credits are bought as financial rights to be traded in the market for profit—rather than to offset the company’s own emissions—the disbursement is not classified as a necessary expense. Instead, it is treated as the acquisition of an intangible asset, and the value must be deducted as a cost only at the time of its sale or when it otherwise loses its quality as an asset.