The reduced income tax rates take effect on 1 January 2025, and the reduced PPM rates apply from August 2025 to December 2027.
Chile’s Tax Administration (SII) has published Circular SII No. 53-2025 on its website on 3 September 2025, outlining guidance for SMEs on applying reduced income tax rates and advance monthly payments (PPMs) for 2025–2027.
The new rules arise from the recent enactment of Law 21,755, which expanded tax benefits for SMEs.
Circular SII No. 53-2025 grants SMEs reduced income tax rates if they meet specified social security contribution thresholds, which are:
| Year | Implementation date of the contribution threshold | Social security contribution rate | Reduced tax rate |
| 2025 | August 2025 | 1% | 12.50% |
| 2026 | August 2026 | 3.50% | 12.50% |
| 2027 | August 2027 | 4.25% | 12.50% |
| 2028 | August 2028 | 5% | 15% |
For 2025–2027, SMEs must calculate PPMs by applying temporarily reduced rates to their monthly gross income, which are:
| Previous year’s gross income | Reduced rate |
| Under 50,000 tax units/month (UF) | 0.13% |
| Over 50,000 monthly UF | 0.25% |
The reduced income tax rates take effect on 1 January 2025, while the reduced PPM rates apply to monthly payments from August 2025 through December 2027.
