Law No. 21,850 · Ongoing C&C Analysis
Tax Reform 2026 in Chile: Law No. 21,850, what changes and with what deadlines
The Law No. 21,850, «Para la Reconstrucción Nacional y el Desarrollo Económico y Social» (formerly Bulletin No. 18,216-05), lowers the First Category Tax from 27% to 23%, restores the full integration of the tax credit, and opens temporary windows to regularize accumulated profits and capital held abroad at a reduced rate. This is the page we keep updated with the analysis, topic by topic, compared against the published text.
In-depth analysis: Substitute tax 2026: eight months to regularize FUR, STUT and excess withdrawals · Capital repatriation 2026: who qualifies, how much is paid and until when · From 27 % to 23 %: the four calendars of the first category tax reduction · VAT on housing 2026: one year without VAT on the first sale, only for what was already finished · Donations with a 50% reduction %: one year to anticipate the inheritance by paying half the tax · SENCE training credit: reduced from 1% to 0.7% from 01-11-2026 · Municipal debts: forgiveness of interest and fines, with a deadline that expires on the same day it opens · Tax assessment: the SII will have to publish how it calculates its contributions, and with that, it can be reviewed · Unpaid municipal taxes and cleaning fees: from 2027 the Treasury can deduct them from your income tax refund · DFL 2: 5% single tax on economic housing rentals from 2027.
Published · Law No. 21,850
The reform is law. It was published in the Official Gazette on Saturday, 17-10-2026, edition No. 44,576-B, as Law No. 21,850, «Para la Reconstrucción Nacional y el Desarrollo Económico y Social». It was enacted on 09-10-2026 and the Comptroller's Office issued the promulgation decree on 16-10-2026.
The general validity period is 01-11-2026: What does not have a specific date takes effect on the first day of the month following publication. The deadlines for the transition windows have already started running, and some date cuts were closed with the publication itself.
He 02-10-2026 The Constitutional Court issued its ruling on its mandatory preventive review (Case No. 17,917-26-CPR). It declared three passages unconstitutional: one article concerning the compensation mechanism for the annulment of environmental qualification resolutions, two paragraphs and one phrase of the new Article 36 bis of the Municipal Revenue Law—which remains in force, albeit abridged—and the sixth paragraph of the seventeenth transitional article. Regarding the tax provisions of the law—except for two provisions it declared compliant—it did not issue a ruling, as these did not pertain to matters of constitutional organic law. The reduction of the First Category Tax and its gradual implementation were not affected.
Status verified on 18-10-2026 against the official text published in the Official Gazette, edition No. 44,576-B of 17-10-2026, CVE 2888352, 46 pages: 34 permanent articles and 24 transitional articles.
By Claudio Cortés Ríos, Contador Auditor (Chilean CPA) and Master's in Taxation (Universidad de Chile), founding partner of C&C Contadores Auditores.
Published on 03-09-2026. Updated on 26-10-2026.
- What changes, in 30 seconds
- Analysis by topic
- From 27% to 23%: the rate cut and full imputation
- The time-limited windows
- How we got here
- How does this affect you?
- Frequently asked questions
- Sources and regulations
What changes, in 30 seconds
- The First Category Tax of the general regime (14 A) is gradually reduced from 27% to 23%, until the commercial year 2029.
- Integration returns: the obligation to return the credit is eliminated, so that the IDPC is again 100% attributable to the owner's final taxes, with a ramp of 30% in AT2028 and 20% in AT2029.
- Temporary windows are opened, with a deadline counted from the publication of the law, to regularize accumulated profits and capital abroad at a reduced rate.
- SMEs under regime 14 D they do not enter into the gradualThey maintain 12.5% in 2026 and 2027, 15% in 2028, and only in 2029 do they reach 23%.
- The Constitutional Court curtailed the tax invariability statute, but did not touch the rate reduction or its gradual implementation.
27% → 23%
Corporate Income Tax (IDPC) towards the 2029 fiscal year
30% → 0%
Credit restitution ramp: 30% at AT2028, 20% at AT2029, zero thereafter
10% / 7%
Capital repatriation: window from 01-01-2027 to 01-01-2028
−50%
Gift tax reduction: deed between 01-12-2026 and 01-12-2027
Analysis by topic
Ten different fronts, each with its own logic and deadline. We order them from the structural (what changes for good) to the transitional (what must be decided against the clock).
General regime
IDPC: from 27% to 23%
The reduction is gradual and is applied per business year, not per tax year: 25.5% in 2027, 24% in 2028 and 23% from 2029. The 2026 business year remains at 27%. The four calendars, in detail.
General regime
Reintegration: end of credit restitution
The semi-integration ends: Article 9 eliminates the obligation of restitution from the 01-01-2027, with a ramp of 30% in tax year 2028 and 20% in 2029. Changes the arithmetic of the retirement policy of every company from 14 A.
SME
Pro Pyme Regime (14 D): outside of gradual implementation
SMEs They don't enter in the calendar 27 / 25.5 / 24. By article 25 of Law No. 21,755, which this law expressly leaves undisturbed, they maintain 12.5% in 2026 and 2027, they go up to 15% in 2028 and they arrive at 23% in 2029.
Window with deadline
Substitute tax on accumulated profits
A single tax on 10% to regularize historical balances—FUR, STUT, and excess withdrawals—and ensure tax compliance. The window is open. from 17-10-2026 and closes on 17-06-2027 (eight months from publication). It is already declared on Form 50. What is gained, what is lost, and how is it declared?.
Window with deadline
Capital repatriation: 10% or 7%
A single tax of 10% is levied on the declared value. This decreases to 7% if the goods are imported into the country and the investment remains in Chile. five years, with at least 80% in assets with Chilean underlying assets. Window: 01-01-2027 to 01-01-2028. Who qualifies and what is excluded.
Window with deadline
Gift tax cut by 50%
One-time discount on 50% of the tax of Law No. 16,271, for deeds signed between the 01-12-2026 and 01-12-2027. Only legitimate heirs and assignees of the fourth of improvements can benefit, and the donated amount cannot exceed the 50% of the donor's total assets. It directly affects anyone who has a real estate or financial assets to order. Requirements, limits and examples in M$.
Investment
Tax invariability, after the Constitutional Court ruling
It was the regulation with the highest risk of legal challenges, and that risk materialized: on 26-08-2026, the Constitutional Court declared unconstitutional provisions of the then-current Article 29 regarding tax stability. The remaining statute is effective as of 01-01-2027. The impact on mining projects, in accounting for mining.
Real Estate
VAT on new housing
VAT exemption on the first sale of new homes, with the seller retaining their construction tax credit, for sales between 01-12-2026 and 01-12-2027. The decisive filter is something else: The property must have its final municipal acceptance dated prior to 17-10-2026, Therefore, the universe of the benefit is the finished stock. For items already registered with VAT, there is a retroactive refund, with a procedure established by the SII (Chilean Internal Revenue Service). Requirements, returns, and scenarios; the sectoral detail, in accounting for construction.
Real Estate
DFL 2: 5% single tax on rentals
A single, optional tax of 5% on gross rent from economic housing of up to 90 m², from each person's third unit onward and for companies whose only business is renting, for rents from 01-01-2027. A transitional window adds new economic housing units of up to 140 m² bought within twelve months of the law's publication. Requirements, deadlines and how to compare.
Tax debt
Debt forgiveness from the Treasury
Within 180 days of publication, for overdue debts as of 31-12-2025: cash payment with up to 100% of interest and 80% of fines waived; agreement of up to 48 installments Monthly payments up to 95% and 75%. Only for individuals and MSMEs under Law No. 20.416, maximum 3 agreements. Do not confuse with the SII's permanent administrative debt forgiveness in effect since 18-06-2026.
From 27% to 23%: the rate cut and full imputation
These are two different changes that are often confused. rate reduction It reduces what the company pays. reinstatement It changes what the owner can deduct when withdrawing. Together they alter the relative desirability of leaving the profit in and withdrawing it—and that comparison needs to be redone, not inherited.
27% → 23%
General regime IDPC rate, phased in until the 2029 business year
12.5% → 23%
Pro Pyme regime rate: 12.5% until 2027, 15% in 2028 and 23% from 2029
| Commercial year | IDPC, general regime (Article 14 A) | IDPC Pro Pyme (14 D) |
|---|---|---|
| 2026 | 27% | 12.5% |
| 2027 | 25.5% | 12.5% |
| 2028 | 24% | 15% |
| 2029 onwards | 23% | 23% |
The tax year is the one that is declared later: the rate of 25.5% for tax year 2027 is declared in the 2028 Income Tax Return. The reintegration transition is not a blackout but a ramp: 30% of restitution in tax year 2028, 20% in 2029 and zero from then on.
The time-limited windows
This is the part of the reform that has a time limit. Several measures are temporary and have deadlines. They already started running on 17-10-2026. The termination dates are calculated according to Article 48 of the Civil Code: the law sets the start and duration, not the closing day.
| Extent | Rate or benefit | Window |
|---|---|---|
| Substitute tax on accumulated profits (FUR, STUT and excess withdrawals) | 10% | 17-10-2026 to 17-06-2027 |
| Capital repatriation | 10%, or 7% with effective income and 5 years of permanence | 01-01-2027 to 01-01-2028 |
| Reduction of the donation tax | 50% of the tax, 50% limit of the wealth | 01-12-2026 to 01-12-2027 |
| Forgiveness of interest and fines before the TGR | Up to 100% of interest and 80% of penalties | until 15-04-2027 (180 days) |
| VAT exemption on the first sale of a new home | Exemption, preserving the construction credit | 01-12-2026 to 01-12-2027, only homes with final acceptance prior to 17-10-2026 |
| Purchase of a new economic housing unit of up to 140 m² (DFL 2) to let | Option for the 5% single tax on gross rent, for rents from 01-01-2027 | 17-10-2026 to 17-10-2027, according to the SII draft circular |
Firm's criteria regarding the 180-day Treasury period: the text states «ciento ochenta días» without specifying whether they are consecutive days, while other provisions of the same law do specify it. We planned for early reading—consecutive days, 15-04-2027—to avoid putting anyone at risk of being late.
Why it's wise to plan ahead: Regularizing accumulated profits at a reduced rate can be considerably more advantageous than leaving them subject to the partner's normal taxation, which can reach the upper bracket of the Global Complementary Tax. The calculation depends on each taxpayer.
How we got here
| Date | Milestone |
|---|---|
| 04-08-2026 | Congress sends the bill to the Executive branch. |
| 05-08-2026 | The President vetoed three articles: compound interest (Art. 32), the right to financial amnesia (Art. 39), and payment terms for SMEs (Art. 40). None of them affected the corporate tax. |
| 10 and 12-08-2026 | The House and then the Senate approve the three suppressive vetoes. |
| 13-08-2026 | The case is now before the Constitutional Court. |
| 18-08-2026 | The Constitutional Court accepts for processing a request from the Government itself against article 31, on free reconnection of basic services in disaster zones. |
| 25-08-2026 | According to reports that day, the Constitutional Court rejected the government's request by 9 votes to 1: the rule remains in place. |
| 26-08-2026 | The Constitutional Court issues a ruling and partially accepts the three requests of the opposition (cases 17.828-26, 17.829-26 and 17.832-26): it declares unconstitutional the rules of article 29 on tax invariability and the environmental rules of articles 5, 11, 12 and 13. The reduction of the IDPC was not challenged nor was it affected. |
| 28-08-2026 | The Ministry of Finance projects the promulgation for the first half of September 2026. |
| 02-10-2026 | The Constitutional Court issued its ruling on its mandatory preventive review (Case No. 17.917-26-CPR): it declared three passages unconstitutional and, except for two provisions that it declared constitutional, did not rule on the tax provisions. This concluded the proceedings before the court. |
| 09-10-2026 | The President of the Republic promulgates the law. |
| 16-10-2026 | The Comptroller General of the Republic issues the promulgation decree. |
| 17-10-2026 | Publication in the Official Gazette, edition No. 44,576-B (CVE 2888352): Law No. 21,850 is born. From this day forward, the deadlines for the transitional windows begin to run. |
| 19-10-2026 | First SII regulation on this law: Exempt Resolution No. 141, which enables the declaration and payment of the substitute tax on Form 50. Administrative implementation begins. |
| 23-10-2026 | SII Exempt Resolution No. 146: special procedure for VAT refunds on homes sold with VAT since the entry of the presidential message, in form F3298. Effective from 01-12-2026. |
| 01-11-2026 | General validity For rules that do not have a specific date: the first day of the month following publication. |
How does this affect you?
The same legal text can lead to different interpretations depending on the perspective. These are the four profiles we're reviewing with clients, and what should be resolved in each case. before the end of the year.
Company under the general regime (14 A)
- Inventory the accumulated credit balance (SAC) as of 31-12-2026: it is charged first and with the old rules.
- Evaluate the substitute tax if you carry over balances from FUR, STUT, or excess withdrawals. The window closes on 17-06-2027.
- Decide on withdrawals for the exercise with the rate of 27% and the current restitution on demand.
SMEs under the Pro Pyme regime (14 D)
- Do not apply the general scheme schedule: your rate remains at 12.5% in 2026 and 2027.
- Budgeting for the PPM increase in 2028, which returns to 0.25% one year before the rate rises.
- Order overdue tax debts as of 31-12-2025 to enter into the forgiveness program, which closes on 15-04-2027.
Family assets and inheritance
- Evaluate the 50% reduction on donations within a succession plan, not in isolation.
- Check the limit: the donation cannot exceed 50% of the donor's total assets.
- Respect the legitimate shares: only legitimate heirs and assignees of the fourth of improvements can be included.
Assets or income abroad
- Filter by the single date cutoff: goods acquired before 01-01-2026.
- Review exclusions and asset origin before looking at the rate.
- Compare the 10% against the 7% with five years of stay in Chile. The full analysis.
At C&C we have been following this reform closely since it was introduced, and we compare every figure against the published text. Schedule a 20-minute diagnostic and we'll review, with numbers, the impact on your company or your assets. Several opportunities close before the end of the tax year. Contact us via WhatsApp (wa.link/s9s7v2) or through our contact form.
You can rely on our services our consulting and tax planning service, tax-compliance and accounting services. If you are also considering how to compensate yourself as a partner under the new fee structure, please review the business salary calculator; and for the monthly VAT transaction, the Form 29 simulator.
Frequently asked questions
Is the 2026 tax reform already law?
Yes. It is the Law No. 21,850, published in the Official Gazette on Saturday, 17-10-2026 (edition No. 44,576-B, CVE 2888352). Congress passed it on 04-08-2026, the vetoes were approved on 12-08-2026, the Constitutional Court issued its preventive control ruling on 02-10-2026, the President promulgated it on 09-10-2026 and the Comptroller issued the promulgation decree on 16-10-2026. The general validity period is 01-11-2026 —first day of the month following publication—, except for regulations with a special date. The deadlines for transitional windows They're already running.
How much will the corporate tax be reduced and from when?
The First Category Tax of the general regime is gradually reduced from 27% to 23% per business year: 25.5% in 2027, 24% in 2028 and 23% from 2029 onwards. The 2026 business year remains subject to 27%.
Will the rate for SMEs also increase to 27% this year?
No. Companies covered by the Pro Pyme Regime of article 14 letter D) they do not enter into the gradualThe sixth transitional article expressly leaves intact article 25 of Law No. 21,755, which maintains its rate at 12.5% during 2026 and 2027, raises it to 15% in 2028 and only then 2029 It takes it to 23%. What this law did change is the landing: it was 25% and now it's 23%.
Did the Constitutional Court ruling change the tax reduction?
No. The August rulings and the preventive control of 02-10-2026, curtailed the tax stability statute and environmental and municipal regulations. The reduction of the IDPC (Property Tax on Consumer Goods) and its phased implementation schedule were neither challenged nor affected.
What is the reintegration of the income system?
The credit for the First Category Tax is again 100%, attributable to the owner's final taxes. Article 9 eliminates the restitution obligation from 01-01-2027, but with a ramp-up: 30% in the 2028 tax year, 20% in 2029, and zero thereafter.
What is the substitute tax and how long does the window last?
A one-time tax under form 10% allows for the regularization of historical balances—FUR, STUT, and excess withdrawals—leaving them tax-compliant. The window opens upon publication and closes on [date missing]. 17-06-2027. You can now file your declaration: SII Exempt Resolution No. 141, dated 19-10-2026, stipulated that the declaration and payment be made online in the Form 50, Lines 82 to 84, with codes 855 and 856 for the STUT, 857 and 858 for the FUR, and 859 and 860 for excess withdrawals. The SII circular on determining the taxable base is still pending. The complete analysis, including what is gained and what is lost.
How does capital repatriation work?
Single tax of 10% on the declared value, within a window ranging from 01-01-2027 to 01-01-2028. The rate drops to 7% if the taxpayer actually brings the goods into the country and maintains the investment in Chile for five years, with at least 80% in assets with Chilean underlying assets.
Is it better to wait to act?
No. The deadlines are already ticking. The assessment—what profits have been accumulated, what assets are held abroad, what should be donated—is being done now, because several opportunities arise in December and January, and anyone who arrives without the necessary background information will be negotiating against the clock.
Sources and regulations
Standard and cited texts
- Law No. 21,850, «Para la Reconstrucción Nacional y el Desarrollo Económico y Social»: published in the Official Gazette on 17-10-2026, Edition No. 44,576-B, CVE 2888352, 46 pages. 34 permanent and 24 temporary articles. Origin: Bulletin No. 18,216-05.
- SII Exempt Resolution No. 141, dated 10-19-2026This establishes the form for declaring and paying the single substitute tax for the final taxes of the eleventh and twelfth transitional articles of Law No. 21,850. It is the first administrative regulation issued regarding this law. It modifies Resolution Ex. SII No. 27 of 2009, concerning Form 50.
- SII Exempt Resolution No. 146, dated 23-10-2026This establishes the special procedure for requesting a VAT refund according to the fourth transitional article of Law No. 21,850 (forms F3298 for the seller and F3299 for the buyer). Effective from 01-12-2026.
- Income Tax Law, articles 14 letters A), D) and G), 20, 38 bis, 56, 63, 74 No. 4, 84 and 107.
- Law No. 21,755, Article 25: temporary reduction of the rate of the Pro Pyme regime, invoked by the sixth transitional article of Law No. 21,850 and not transcribed therein.
- SII Circular No. 53, dated 03-09-2025, regarding Law No. 21,755, which transcribes its article 25 in full. Its section 1.3.1 states that the permanent Pro Pyme rate «es de 25%»That statement was superseded on 01-11-2026.
- Law No. 16,271 on inheritance, assignment and donation tax; Law No. 20,416 on MSMEs; Law No. 21,735, fourth transitional article; DFL No. 2 of 1959 on housing plan.
- Civil Code, article 48: calculation of the periods of months and years of the transitional windows.
Background of processing and control
- Constitutional Court, judgment of 26-08-2026 in the accumulated roles 17.828-26, 17.829-26 and 17.832-26.
- Constitutional Court, Roll No. 17.917-26-CPR, mandatory preventive control dispatched on 02-10-2026.
- Comptroller General of the Republic: taking note of the promulgation decree, 16-10-2026.
- Budget Directorate (DIPRES), Financial Report No. 84 of 22-04-2026 and Supplementary Report No. 103 of 18-05-2026.
- Chamber of Deputies, Official Letter No. 21,440 of 04-08-2026.
Source level declared: The figures, deadlines, and citations on this page were compared on 18-10-2026, against the official text published in the Official Gazette, and revised on 21-10-2026, incorporating SII Exempt Resolution No. 141, and on 26-10-2026, incorporating SII Exempt Resolution No. 146. Where a termination date is calculated using Article 48 of the Civil Code, it is indicated. The interpretation criteria that the law itself leaves open—such as whether the 180 Treasury days are calendar days or business days—are indicated as the firm's interpretation, not as legal text.
Note on figures (exception to the presentation criterion in M$ / MUSD): the amounts and percentages on this page are expressed as set by the legal text, so as not to alter the cited figure.
Claudio Cortés Ríos is a founding partner of C&C Contadores Auditores, a Chilean accounting, auditing, and tax advisory firm. He is a Public Accountant and Auditor and holds a Master's degree in Taxation from the University of Chile. Analysis of the C&C tax team. About us · LinkedIn
The content is for general informational purposes only and does not constitute tax, accounting, labor, or legal advice for specific cases. The subject matter analyzed corresponds to the Law No. 21,850, published in the Official Gazette on 17-10-2026 (edition No. 44,576-B, CVE 2888352), whose general validity begins on 01-11-2026. Its application to specific situations requires individualized analysis. CYC Contadores Auditores Limitada assumes no responsibility for decisions made solely on the basis of this content.
This English version is a courtesy translation, machine-assisted and reviewed in part. The Spanish version prevails. Literal quotations of Chilean law are kept in Spanish, as a translation of statutory text would not be authentic. Figures and deadlines were verified against the Diario Oficial text of Law No. 21,850 of 17 October 2026. Dates are shown as day-month-year.