Unpaid municipal taxes and cleaning fees: from 2027 the Treasury can deduct them from your income tax refund

Under Law No. 21,850, municipalities will send the Treasury a list of those who owe taxes on business licenses and sanitation services every March, and the Treasury will withhold these debts from the annual tax refund. This applies to both individuals and businesses, and the first list will be sent in March 2027.

In brief

What changes: Each year, within the first fifteen days of March, the municipalities send to the Treasury a list of delinquent taxpayers in municipal licenses and sanitation fees. The payroll has executive merit and the collection is transferred to the Treasury.

The most noticeable effect: In March, before paying the annual income tax refund, the Treasury checks if the taxpayer is on the payroll and withholds the amount owed from the refund, with adjustments, interest, and penalties. If the debt is greater than the refund, it withholds the full refund.

Who is affected: to any taxpayer with unpaid license or sanitation fees and income tax refund, whether individuals or companies.

What debts are included: only debts «giradas y actualmente exigibles», not time-barred, with no pending claims or suspension of collection. first payroll It may include debts incurred before the law that are not in judicial collection.

Dates: has been in effect since 01-11-2026. The Treasury must issue the resolution in the payroll format within 90 days of publication (→ 15-01-2027). First payroll: March 1-15, 2027.

Legislation · Law No. 21,850, article 31 (new articles 47 bis, 47 ter and 47 quater of Decree Law No. 3,063, on Municipal Revenues) and seventeenth transitional article, published in the Official Gazette on 10-17-2026

Verified on 27-10-2026

1. How it works

Passed	What the law says
Roster	The municipality sends it «dentro de los primeros quince días del mes de marzo de cada año», with name or business name, RUT (tax ID number), license or property registration number, periods and amount with adjustments, interest and penalties. The municipal secretary signs as a certifying official (art. 47 bis)
Inhibited municipality	Once the payroll has been submitted, the municipality can no longer collect these debts, receive payment directly, enter into agreements, or grant debt forgiveness. If it does receive a payment, it must inform the Treasury within five days (Art. 47 bis).
Collection	The Treasury handles the administrative and judicial aspects of tax collection, in accordance with the rules of Title V of Book III of the Tax Code. It may offer payment facilities (Art. 192 CT) and waive interest and penalties according to its policies (Art. 207 CT) (Art. 47 ter).
Retention	In March, before paying the annual tax refund. after of the withholding for child support payments and other debts with legal priority. If there are debts in several municipalities, the oldest ones are paid first. The taxpayer and the municipality are notified (art. 47 ter)
Defense	The taxpayer can only object with the exceptions of article 177 of the Tax Code (art. 47 ter)
Whole	The Treasury transfers the collected funds to each municipality within the first fifteen days of the following month (art. 47 quater)

2. An example

(For reference only, without customer data.) A company has a tax refund of M$ 3.500 and an unpaid patent which, with adjustments, interest and fines, adds up to M$ 1.200. The Treasury retains M$ 1,200 and returns M$ 2.300. If the debt were M$ 5,000, would retain the full refund (M$ 3,500) and would remain M$ 1.500 in collection.

3. The dates

Date	That
01-11-2026	Article 31 applies: «Lo dispuesto en el artículo 31 entrará en vigor el primer día del mes siguiente al de su publicación en el Diario Oficial». The existing collaboration agreements for collecting patents and sanitation fees will no longer apply to those debts.
01-12-2026	Opens the forgiveness of interest and fines on municipal debts (tenth transitional article). The background checks expire that same day. (see municipal debt alert)
15-01-2027	The deadline for the Treasury to issue the resolution with the means, format and validations of the payroll expires. Self-calculation: 90 consecutive days from 10/17/2026; the law does not say if they are working days
March 1-15, 2027	First list of municipalities
March 2027	First verification by the Treasury before paying the refunds for the 2027 Income Tax Return

One point that the law does not resolve: The payroll is sent in the first half of March and the verification also takes place «en el mes de marzo». The text doesn't explain how these are coordinated in the first year. It's safe to assume that a debt reported in March 2027 could affect the repayment in 2027.

4. What to do before March 2027

Request a statement of debt of patents and cleaning in each municipality where you have a patent or property.
If the debt is from 2023 to 2025, Evaluate the waiver of interest and fines under the tenth transitional article. Your background check expires on 01-12-2026.
If the debt is miscalculated, File your claim with the municipality before March: a debt with an outstanding claim cannot be included in the payroll.
In the 2027 Income Tax Return, Check if the refund is reduced; the withholding is reported to the taxpayer.

5. Frequently Asked Questions

What debts can be deducted from my refund?

Those related to municipal licenses and sanitation fees that the municipality includes in the payroll sent to the Treasury.

Since when?

The article is effective from 01-11-2026. The first payroll is sent between March 1 and 15, 2027, and the withholding applies to the annual income tax refund.

Does it also affect businesses?

Yes. The law refers to "taxpayer," without distinguishing between individuals and companies.

Can old debts be included?

Yes. The first payroll can include debts prior to the law that are not in judicial collection and that are not time-barred.

What happens if the debt is greater than my repayment?

The Treasury retains the full refund and the balance remains in collection.

Can I pay or make an agreement with the municipality?

Once the payroll has been sent, that's it: the municipality is no longer involved and the payment facilities are provided by the Treasury.

How can I defend myself if the debt is not legitimate?

The only exceptions to the tax authority's rules are those outlined in Article 177 of the Tax Code. Therefore, it's advisable to settle your debt with the municipality before March.

Is it related to the forgiveness of municipal debts?

Yes. For debts from 2023 to 2025, the waiver of interest and penalties opens on 01-12-2026 and your records expire on that same day.

6. Sources and regulations

Law No. 21,850, «Para la Reconstrucción Nacional y el Desarrollo Económico y Social», published in the Official Gazette on 17-10-2026, CVE 2888352. Article 31 Nos. 5, 6 and 7 (articles 47 bis, 47 ter and 47 quater of Decree Law No. 3,063, on Municipal Revenues) and tenth and seventeenth transitional articles.

Let's discuss your case

If your company or you have outstanding permits or sanitation fees in one or more municipalities, the task is to settle those debts before March 2027. Check out our service for tax-compliance, Write to us via WhatsApp or through our contact form.

This article is for informational purposes only and does not constitute tax advice for any specific case. Deadlines were verified against the text of Law No. 21,850 published in the Official Gazette on October 17, 2026. Content updated as of October 27, 2026.

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.