On 22 April 2026, the Chilean Government submitted a comprehensive legislative package to Congress, aimed at accelerating economic growth, restoring legal certainty and fostering domestic and foreign investment.

The bill combines structural tax reforms, a new tax stability framework, temporary incentive regimes and key regulatory changes, many of which may have a material impact on multinational groups and foreign investors operating or considering operations in Chile.

Though congressional discussions on the bill have just been initiated and the text is subject to potential changes and amendments, several measures already stand out as particularly relevant from an inbound investment and international tax planning perspective.

Key measures of interest for foreign investors

The bill contains numerous measures of interest foreign investors. Key examples are listed here:

• The corporate income tax rate would be gradually reduced from 27% to 23% by tax year 2029.
• Current limitations on the dividend tax credit mechanism would be removed, effectively returning Chile to a fully integrated corporate tax system.
• A temporary substitute dividend withholding tax would be introduced for historical accumulated profits, facilitating cash repatriation strategies for shareholders.
• A new employment tax credit would be created for certain qualified wages and salaries, replacing the existing tax credit for corporate training expenses.
• The 10% capital gains tax on disposals of publicly traded securities would be repealed, restoring the full exemption regime.
• A tax stability (tax invariability) regime would be reinstated for large-scale investments, applicable to both foreign and domestic investors entering into investment protection agreements with the State.
• A temporary voluntary disclosure and repatriation regime would be established for previously unreported or unrecognized foreign-source income and assets, subject to reduced substitute tax rates.

Detailed discussion of measures

Corporate income tax reduction

The corporate income tax rate would gradually decline from 27% to 23% by commercial year 2029 as follows:

• 2026 ® CIT 27%
• 2027 ® CIT 25.5%
• 2028 ® CIT 24%
• 2029 onward ® CIT 23%

Return to full tax integration

The bill proposes a return to a fully integrated tax system, under which corporate income tax paid at the Chilean-company level will be fully creditable against dividend taxes borne by its shareholders.

This change is particularly beneficial for foreign investors resident in jurisdictions without a double tax treaty with Chile who are currently subject to a higher effective tax burden because a portion of the corporate tax is not creditable and therefore becomes a final cost. Under the proposed reform, this limitation would be eliminated, aligning the tax treatment of non-treaty foreign investors with that of treaty investors and reducing the current disparity in effective tax rates (currently up to 44.45% versus 35%).

The reform will be implemented gradually, with temporary limitations on the use of corporate tax credits during the transition period, reaching full integration — and full creditability — from tax year 2030.

Substitute taxes for accumulated profits

The bill introduces an optional 10% substitute tax for accumulated profits that are currently pending final taxation, including legacy Chilean retained earnings and historical excess withdrawals generated prior to the current tax system (including amounts originating from the former FUT (standing for Fondo de Utilidades Tributables, meaningBalanceof Taxable Profits Records), which was in force until 2016).

By electing this regime, the relevant profits are deemed fully taxed in Chile and may be distributed or remitted to shareholders without triggering additional dividend withholding tax and without being subject to the statutory ordering allocation rules. No corporate tax credits would be available, as the 10% tax fully replaces final shareholder taxation.

This measure provides clear cash repatriation opportunities, particularly attractive for foreign investors — including those resident in non-treaty jurisdictions who hold trapped or historical profits subject to higher effective tax rates under the ordinary regime. The election is time-limited and may be exercised within eight months from the publication of the law, with respect to eligible balances determined as of fiscal years 2025 or 2026.

Employment tax credit

The bill introduces a new employment tax credit focused on jobs at the lower end of the wage scale, aimed at lowering the cost of formal hiring while simultaneously eliminating the existing tax credit for corporate training expenses.

The employment tax credit would be calculated individually for each employee, based on employee total monthly remuneration. For employees whose monthly pay falls at the lower end of the wage scale, the credit is equal to 15% of that monthly pay, with the percentage gradually reduced as wages increase, and fully phased out once remuneration exceeds the specified upper threshold. For these purposes, monthly remuneration includes not only taxable salary, but also any additional allowances or similar compensation.

The credit may be offset sequentially against monthly provisional corporate prepayments, value-added tax (VAT) liabilities and corporate income tax, with any unused balance carried forward to future periods and adjusted for inflation.

Capital gains tax repeal for publicly traded securities

The bill repeals the 10% single tax on capital gains derived from the disposal of publicly traded shares and securities with stock-exchange presence, restoring the full exempted regime available up to 2022. If approved, the repeal would apply from 1 January 2027.

New tax stability regime for large investments

The bill creates a new tax stability regime applicable to investment projects equal to or exceeding US$50m, available to both foreign and domestic investors. Under this regime:

• Stability is secured through investment agreements entered into with the State.
• Tax invariability is guaranteed for 25 years from the commencement of the project and covers tax base, rates and administrative interpretations, including VAT, customs duties on capital goods, depreciation rules, loss carryforwards, pre-operational expenses and authorization to keep accounting records in foreign currency.
• For foreign investors, a maximum total tax burden of 35% is guaranteed, excluding mining royalties.
• For local investors, invariability applies to corporate income tax, personal taxes and VAT.
• The mining industry would benefit from additional invariability regarding mining royalties, new sector-specific taxes and mining concessions.
• More-favorable tax amendments introduced during the term of the agreement will automatically apply without requiring waiver of stability.

Temporary voluntary disclosure regime for foreign assets

The bill introduces a temporary and extraordinary voluntary disclosure regime allowing taxpayers to regularize previously undeclared foreign assets and income for Chilean tax purposes. The regime has broad scope and covers assets held directly or indirectly abroad, including through trusts, fiduciary arrangements, agents or similar structures, as well as Chilean assets or income held via offshore vehicles. In all cases, the ultimate beneficial owner must be disclosed.

Eligible taxpayers may opt to pay a single substitute tax of 10% on the declared value of the assets and income. A reduced 7% rate applies if the assets are effectively repatriated and reinvested in Chile for at least five years, thereby encouraging capital inflows. The regime applies only to assets acquired prior to 1 January 2025, and to income generated up to 31 December 2025, and will be available for a limited 12-month period.

Although primarily aimed at Chilean taxpayers, this regime may be relevant in pre-investment restructurings, regularization or simplification transactions, particularly as a tool to simplify ownership structures and mitigate historical tax exposure ahead of new investments.

Temporary debt relief and regularization measures

Tax debt relief

The Treasury would be authorized, for a period of 180 days following the publication of the law, to provide payment facilities for overdue tax liabilities. Key benefits include:

• Up to 100% waiver of interest and up to 80% of penalties in case of lump-sum payment
• Up to 95% waiver of interest and 75% of penalties under payment arrangements of up to 24 installments
• A minimum down payment of 10% of the original principal in the case of installment agreements

This measure is primarily aimed at individuals and micro, small and medium-sized enterprises, although its scope may extend to other taxpayers with outstanding liabilities.

Municipal debt regularization

An extraordinary procedure is established to regularize municipal debts of individuals and legal entities, including a broad range of permits, licenses and other unpaid municipal rights and fees.

The regime applies to debts accrued up to 31 December 2025, and provides:

• Full waiver of interest and penalties
• The possibility for municipalities to waive collection actions for periods subject to the statute of limitations
• Eligibility for debts under judicial collection, provided no final judgment has been issued

The regime would be available for a limited period following the publication of the law, during which time taxpayers must submit applications to the relevant municipality to access its benefits.

Next steps

The bill is currently under legislative review, and its final content may evolve during congressional debate. Foreign investors should closely monitor legislative developments and assess potential impacts on their investment structures, repatriation strategies and long-term tax exposure in Chile.

EY teams in Chile are actively tracking this process and will publish additional Tax Alerts as developments emerge.