Chile has enacted Law No. 21.850, introducing corporate tax rate reductions, investor tax stability, housing tax relief, and incentives for knowledge exports, alongside measures to support disaster reconstruction and voluntary repatriation of foreign assets.
Chile published Law No. 21.850 in the Official Gazette on 17 October 2026, enacting a wide-ranging fiscal, regulatory, and economic package designed to promote post-disaster recovery, stimulate investment, and overhaul key tax and administrative frameworks.
The key measures are as follows:
Corporate income tax reductions
The law introduces progressive reductions in First Category Corporate Income Tax rates. Under the General Tax Regime, the rate will decrease from 27% in 2026 to 25.5% in 2027 and 24% in 2028, before settling permanently at 23% from 2029. Under the Pro Pyme Regime for qualifying small and medium-sized enterprises, the rate will be permanently reduced from 25% to 23%, effective 1 January 2029.
Tax invariability regime for investors
A new tax invariability regime will take effect in Chile on 1 January 2027 to attract investments of at least USD 50 million in sectors including mining, energy, infrastructure, telecommunications, and research. The regime guarantees tax stability for 10, 15, or 20 years, depending on the investment amount, in exchange for a 1.5% increase in the First Category Corporate Income Tax rate. Both foreign and domestic investors are eligible under the same conditions.
Emergency reconstruction & disaster relief
The law amends Law No. 21.681 to extend Chile’s Temporary Emergency Fire Fund (Fondo de Emergencia Transitorio por Incendios) until 31 December 2028, with authorised funding of up to CLP 1.2 trillion. The fund will support reconstruction following the February 2024 fires in Valparaíso and the January 2026 fires in the Ñuble and Biobío regions.
Expenditure will focus on permanent housing construction and community infrastructure, while the use of funds for public relations, institutional advertising, and promotional events is expressly prohibited.
Real estate, housing, and municipal tax relief
- Temporary VAT exemption on new homes: The law introduces a one-year Value Added Tax (VAT) exemption on the first sale of new residential properties that received definitive municipal completion certificates before the law’s publication.
- Single tax on small rental properties: Individuals and legal entities renting out small economic housing units of up to 90 m², starting from their third unit, may opt for a 5% single tax on gross rental income, with no deductions permitted.
- Property tax exemption for seniors: Individuals aged 65 or older receive a 100% exemption from property taxes on their primary residence and associated parking and storage units.
Incentives for knowledge exports and healthcare
- Knowledge economy payroll tax credit: First Category taxpayers exporting digital or knowledge-based services can claim a 15% tax credit against First Category tax on wages paid to Chilean resident employees involved in export production. The credit increases to 20% if the company operates outside the Metropolitan Region or in designated rural communes.
- Catastrophic health expense credit: Employers making direct payments for catastrophic medical treatments for workers or their close family members receive a tax credit of up to 150 UTM per employee over the duration of the employment relationship.
Voluntary capital repatriation and asset declaration
The law establishes a 12-month voluntary extraordinary system for Chilean tax residents to declare unreported foreign assets and income:
- Standard substitute tax: A 10% tax rate on the declared market value of foreign assets/income.
- Reduced rate for repatriation: A reduced 7% rate applies if assets/income are physically repatriated to Chile and maintained in qualified Chilean investments for at least five years.
