Law 20,899 was published in the Official Gazette on February 8 2016. It amends the Income Tax Act, the Value Added Tax (VAT) Act, the Tax Code and other laws in order to simplify the implementation of the tax reforms introduced in September 2014.

Income Tax Act

Regarding the Income Tax Act, Law 20,899 simplifies the interaction between income tax regimes.

Attributed income

This system (ie, a 25% corporate income tax rate with a 100% credit on final personal taxes) will be available for individual entrepreneurs, individual limited liability companies, communities, joint stock companies, certain foreign taxpayers and partnerships whose members or shareholders are exclusively individuals domiciled or resident in Chile and/or taxpayers not domiciled or resident in Chile. Corporations are not entitled to use this regime.

Default regime

In the absence of an election, all taxpayers entitled to use this regime will be subject to it by default, except joint stock companies and foreign taxpayers, which will be subject to the semi-integrated regime.

Semi-integrated regime

This regime (ie, a 65% credit against final personal taxes) applies mandatorily for corporations – either public or private – and companies with corporate shareholders.

Shareholders will be taxed on distribution of profits by the company, but will be entitled to use only 65% of the corporate income tax paid by the distributing company against their personal taxes.


Exemption from VAT for new houses has been extended to all new projects with a building permit granted in 2015 and that are completed before the end of 2017.

Tax Code

In the context of the Tax Code, Law 20,899 clarifies that the anti-avoidance rule effective from September 30 2015 cannot be applied retroactively.

For further information on this topic please contact Omar Morales at Montt y Cia SA by telephone (+56 22 233 8266) or email ( The Montt y Cia SAwebsite can be accessed at

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