Bill for National Reconstruction and Economic Development

On April 15, President José Antonio Kast, in his first national broadcast, presented a set of legislative reforms aimed at boosting economic growth, attracting investment, strengthening formal employment, and financing the reconstruction of regions affected by recent fires.

It should be noted that this is a preliminary announcement by the Executive, still subject to possible modifications before its submission to Congress.

Although the announced measures cover various areas, the project focuses primarily on tax-related modifications and other initiatives designed to facilitate project development. Among the most relevant are:

Reduction of Corporate Income Tax (IDPC) to 23% and Reintegration of the System

A gradual reduction of the Corporate Income Tax is projected, applicable to companies with full accounting as well as SMEs, reaching 23% by 2029.

For SMEs, the transitional regime under Law No. 21,755 will remain in force, providing for a gradual increase in the tax rate to 12.5% in 2026 and 2027 and 15% in 2028, subject to certain requirements, ultimately reaching 23% by 2029 instead of the initial 25% established in the transitional law.

The reintegration of the system is scheduled to begin in tax year 2031.

Temporary Reduction of the Donations Tax’ rate (Law No. 16,271)

A twelve-month window is established, counted from the first business day of the month following the publication of the law, during which the donations tax will be reduced by 50%.

Repatriation of Capital at a 10% Rate for 12 Months

A temporary and voluntary system is introduced for declaring foreign assets or income, subject to a single tax of 10% on the declared value. Additionally, a reduced rate of 7% will apply to those who effectively repatriate their assets within the first three years following the publication of the law and keep them invested in DFL2 real estate or in securities regulated under Article 107 of the Income Tax Law.

Temporary and Optional VAT Exemption on the Sale of New Homes (12 Months)

This benefit, optional for the taxpayer, will apply both to purchase promise contracts entered into within the 12-month period (counted from the first day of the third month following the publication of the law) and to sales carried out from the date of submission of the presidential message that originated the project.

Tax Credit for the Protection of Formal Employment

A tax credit is created in favor of employers, both large companies and SMEs, granted progressively based on wages between 7.8 and 12 UTM. The benefit may be applied against monthly provisional payments, VAT, and Corporate Income Tax.

Elimination of Property Tax on the Primary Residence for Adults Over 65

Individuals over 65 will be exempt from paying property tax on their primary residence. If they own more than one property, the exemption will apply only to the one declared as their main residence.Shorter window for the administration to revoke its permits

Under current rules, the administration can revoke a sectoral permit for up to two years after issuance. The bill will cut that window to six months. For developers in energy, mining, infrastructure and construction, this means they can break ground and secure financing without carrying that uncertainty, shortening their period of exposure.

Reimbursement of costs if an environmental approval is overturned in court

Environmental approvals can be challenged by third parties in court, who may eventually succeed in having them overturned. The bill will create a reimbursement mechanism for costs incurred between the granting of approval and any subsequent court revocation. It functions as state-backed insurance against litigation risk, sending a clear signal to the market: obtaining an environmental approval should give developers the confidence to move forward with their projects.